The BlackRock U.S. Carbon Transition Readiness ETF (ticker LCTU) launched last week breaking funding records on its first trading day with $1.25 billion invested. We’ve just found out that the fund holds major oil and gas companies including Exxon, Chevron, ConocoPhillips, Marathon Petroleum, and Devon Energy; fossil-fired utilities including Berkshire Hathaway, Consolidated Edison, and UGI; and oil field services and pipeline companies including Kinder Morgan, Baker Hughes, and Schlumberger. Scroll down for the full Invest Your Values scorecard below, or read our press release here.

Invest Your Values scorecard: BlackRock U.S. Carbon Transition Readiness ETF (LCTU)

Fossil fuel grade: D
Deforestation grade: C
Carbon footprint: LOW
Gender equality grade: B
Civilian firearm grade: B
Prison industrial complex grade: C
Military weapon grade: D
Tobacco grade: B

Environmental scorecard

Fossil fuel grade: D

With 5.9% exposure to companies on our fossil fuel screens, the fund is assigned a fossil fuel grade of D.

We found seven holdings from the Carbon Underground 200, the top coal and oil/gas reserve owners:

Exxon Mobil
Diamondback Energy
Devon Energy
EOG Resources

The fund is also invested in Berkshire Hathaway, a top coal-fired utility.

Other fossil fuel holdings (coal industry, oil/gas industry, and fossil-fired utilities):

Kinder Morgan
Cheniere Energy
Williams Companies
Baker Hughes
Marathon Petroleum
Valero Energy
NextEra Energy
Eversource Energy
Consolidated Edison

Deforestation grade: C

The fund is assigned a deforestation grade of C due to an investment in WestRock, a global powerbroker for pulp and paper that is lagging in deforestation free supply chain policy commitments. We found 15.7% exposure to the broader deforestation screen list, including financiers and consumer brands:
JPMorgan Chase
Home Depot
Johnson & Johnson
Bank of America
Procter & Gamble
Lowe's Companies
CVS Health
DuPont de Nemours
Yum Brands
Estee Lauder Cos
Morgan Stanley
Kraft Heinz
Hain Celestial Group
TJX Companies
General Mills
Campbell Soup
Costco Wholesale
Dollar Tree

Carbon footprint: LOW

The fund had better results on the carbon footprint analysis. The fund showed a carbon footprint of 40.4 tonnes CO2 / $1M USD invested, which is low compared to common benchmarks, and a carbon intensity of 87.4 tonnes CO2 / $1M USD revenue, which is also low compared to common benchmarks. (Carbon footprint and carbon intensity metrics are based on scope 1 and scope 2 emissions only.)

Social scorecard

Gender equality grade: B

The fund earned a gender equality score of 43 points out of 100, which placed it at the 70th percentile for U.S. equity funds, which is assigned a gender equality grade of B.

Civilian firearm grade: B

We found no direct investments in gun manufacturers. The fund had one investment flagged by the gun retailers screen, Walmart, earning the fund a civilian firearm grade of B.

Prison industrial complex grade: C

The fund is assigned a prison industrial complex grade of C due to investments in Raytheon Technologies and L3Harris Technologies from the screen of companies with significant involvement in the prison or border industries.

We found 14.1% exposure to the broader prison industrial complex screen list, including financiers:

JPMorgan Chase
Bank of America
Wells Fargo
Raytheon Technologies
L3Harris Technologies
U.S. Bancorp
Truist Financial
Leidos Holdings
Costco Wholesale

Military weapon grade: D

With 2.2% exposure to major military contractors and nuclear weapon services companies, the fund is assigned a military weapons grade of D.

Honeywell International
Raytheon Technologies
General Electric
L3Harris Technologies
Leidos Holdings

Tobacco grade: B

We found no direct investments in tobacco producers. The fund had four investments flagged by the tobacco-promoting entertainment studios screen, earning the fund a tobacco grade of B.

These results are based on fund holdings found on on Apr. 19th, 2021.

To search the list of funds in our database, and the grades they earn from the Invest Your Values tools, click here.

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