# BlackRock fund targets greening of materials sector
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-06-13
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: BlackRock Launches Brown to Green Materials Fund for Energy
Meta Description: Invest in undervalued carbon-intensive companies in the greening materials sector driving energy transition. Discover earnings potential with sustainability in
URL: https://financedigest.com/blackrock-fund-targets-greening-of-materials-sectorhtml

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# BlackRock fund targets greening of materials sector

By Clara Denina and Simon Jessop

LONDON (Reuters) – BlackRock on Tuesday launched the “Brown to Green Materials Fund” targeting undervalued carbon-intensive companies that produce the raw materials and products driving the energy transition.

Investors are increasingly focused on what actions companies in industries such as metals and mining, cement, and construction, are taking to decarbonise, as the sectors produce over 17% of global greenhouse gas emissions.

Growing demand for lithium, copper and other metals critical to the green [energy transition](https://www.financedigest.com/how-can-we-ensure-that-africas-energy-transition-aligns-with-its-development-ambitions.html "How can we ensure that Africa’s energy transition aligns with its development ambitions?") is poised to benefit the earnings growth of companies throughout the supply chain from mine to end-product, should the adoption of lower carbon technologies exceed expectations, BlackRock said.

Those companies that produce the materials and have a quality plan to decarbonise – and their suppliers – should re-rate as their margins get a [boost and sustainability risks](https://www.financedigest.com/dollar-soft-as-china-reopening-hopes-boost-risk-sentiment.html "Dollar soft as China reopening hopes boost risk sentiment") decrease, it said.

The fund manager screened index provider MSCI’s All-Country World Index for the world’s highest emitting companies that are likely to see [rising demand as a result of the transition over the next 10-20 years](https://www.financedigest.com/new-global-renewables-capacity-additions-to-rise-by-a-third-this-year-iea.html "New global renewables capacity additions to rise by a third this year – IEA"), selecting those with the technology and finances to implement changes in a realistic timeframe, said Evy Hambro, BlackRock’s global head of Thematic and Sector Investing.

This broad materials universe is trading at such (a) large discount relative to the broader market and [growth opportunity,”](https://www.financedigest.com/imf-amf-afesd-and-government-of-morocco-to-host-regional-conference-opportunity-for-all-promoting-growth-jobs-and-inclusiveness-in-the-arab-world.html "IMF, AMF, AFESD and Government of Morocco To Host Regional Conference: “Opportunity for All—Promoting Growth, Jobs, and Inclusiveness in the Arab World”") based on how they have historically been viewed, he told Reuters.

Once people [understand that these businesses](https://www.financedigest.com/key-gdpr-facts-that-all-businesses-must-understand.html "Key GDPR facts that all businesses must understand") are becoming increasingly green in their production processes, it is likely that the discount that is applied to them is going to reduce.

(Editing by David Evans)


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