THE STRATEGY

Funds with this strategy seek to reduce exposure to carbon emissions or activities related to fossil fuels. The iShares ESG Advanced MSCI USA ETF, for instance, seeks to track an index of companies with favorable environmental, social and governance (ESG) ratings while also screening out those involved in controversial business activities, including those related to fossil fuels.2

Other funds, like the iShares MSCI ACWI Low Carbon Target ETF, for example, reduce exposure by targeting companies with lower carbon emissions.