A. Summary

This Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment. The Fund does not commit to investing in sustainable investments. The Fund seeks to promote the following environmental and social characteristics by tracking the performance of the Bloomberg Global Aggregate Corporate Index, its Benchmark Index, and applying an ESG policy that: (1) excludes issuers involved in certain activities deemed to have negative environmental and/or social outcomes; (2) excludes issuers deemed to have violated United Nations Global Compact principles; and (3) excludes issuers deemed to be involved in very severe ESG related controversies.

The investment objective of the BlackRock for Formue Corporate Bond Index Fund (the “Fund” for the purposes of the section of the Supplement entitled “Investment Objectives and Policies for the BlackRock for Formue Corporate Bond Index Fund) is to provide a total return, taking into account both capital and income returns, which reflects the total return of the Bloomberg Global Agg Corporate ex-EM (unhedged in NOK) (the “Benchmark Index”). The binding elements of the investment strategy are as follows: (1) Subject to investing in such assets as required for the Fund to meet its investment objective and policy, the Fund will promote its environmental and social characteristics by excluding direct investment in issuers which are involved in the following activities: i) deriving more than 5% of revenue from thermal coal extraction and thermal coal-based power generation, with the exception of “green bonds” that are considered to comply with the International Capital Markets Association’s Green Bond Principles, from such issuers; ii) deriving more than 5% of revenue from production of tar sands (also known as oil sands); iii) production of controversial weapons (including, but not limited to, cluster munitions, landmines, depleted uranium weapons, biological-chemical weapons, blinding lasers and incendiary weapons as defined by the methodology of the MSCI Ex-Controversial Weapons Indexes); iv) production of nuclear weapons or nuclear weapon delivery platforms or the provision of auxiliary services related to nuclear weapons; v) production or deriving more than 5% of revenue from distribution of firearms intended for retail to civilians; vi) production of tobacco products or deriving more than 5% of revenue from distribution of tobacco related products; vii) deemed to have failed to comply with the UN Global Compact Principles; and viii) severe controversies (based on very severe business controversies as defined by a third party ESG data provider). (2) The definition of “involved” in relation to each activity may be based on generating or deriving a revenue from the activity that exceeds a percentage of revenue or a defined total revenue threshold, or any exposure to the activity regardless of the amount of revenue received. The activity may relate to production or distribution or both.

The Fund seeks to invest in a portfolio of securities that as far as possible and practicable consists of the component securities of the Benchmark Index and comply with the Fund’s ESG Policy. It is expected that at least 80% of the Fund’s assets will be invested in investments that are aligned with environmental and/or social characteristics promoted by the Fund. In the event that any investments cease to comply with the Fund’s ESG policy, the Investment Manager will liquidate the position as soon as it is possible and practicable (in the Investment Manager’s view) to do so. The Fund may invest up to 20% of its total assets in other investments. This Fund does not currently commit to investing more than 0% of its assets in investments in environmentally sustainable economic activities within the meaning of the Taxonomy Regulation.

The Fund does not currently commit to invest in fossil gas and/or nuclear energy related activities that comply with the EU Taxonomy, however, these investments may form part of the portfolio.

The Fund seeks to invest in a portfolio of securities that as far as possible and practicable consists of the component securities of the Benchmark Index, but excluding securities of issuers that do not comply with the Fund’s ESG Policy. The environmental and/or social characteristics which the Fund seeks to promote are incorporated within the Fund’s ESG policy and the Fund is managed in a manner that seeks to identify and exclude securities of issuers that do not comply with the Fund’s ESG policy.

BlackRock Portfolio Managers have access to research, data, tools, and analytics to integrate ESG insights into their investment process. ESG datasets are sourced from external third-party data providers and index providers, including but not limited to MSCI, Sustainalytics, Refinitiv, S&P and Clarity AI. BlackRock’s internal processes are focused on delivering high-quality standardised and consistent data to be used by investment professionals and for transparency and reporting purposes. Data, including ESG data, received through our existing interfaces, is processed through a series of quality control and completeness checks which seeks to ensure that data is high-quality data before being made available for use downstream within BlackRock systems and applications, such as Aladdin.

BlackRock applies a comprehensive due diligence process to evaluate provider offerings with highly targeted methodology reviews and coverage assessments based on the sustainable investment strategy (and the environmental and social characteristics or sustainable investment objective) of the product. Our process entails both qualitative and quantitative analysis to assess the suitability of data products in line with regulatory standards as applicable.

Sustainable investing and understanding of sustainability is evolving along with the data environment. Industry participants, including data providers face challenges in identifying a single metric or set of standardized metrics to provide a complete view on a company or an investment. ESG data sets are constantly changing and improving as disclosure standards, regulatory frameworks and industry practice evolve. There may be some circumstances where data is unavailable, incomplete, or inaccurate. Despite reasonable efforts, information may not always be available in which case an assessment will be made by the index provider based on their knowledge of the investment or industry. In certain cases, data may reflect actions that issuers may have taken only after the fact, and do not reflect all potential instances of significant harm.

BlackRock applies a high standard of due diligence in the selection and ongoing monitoring of investments made by the Fund for the purpose of compliance with the investment, liquidity and risk guidelines of the Fund, as well as the sustainability risk and ESG criteria and general performance.

The Investment Manager does not perform direct engagement with the companies / issuers within the Benchmark Index as part of the investment strategy of the Fund. The Investment Manager will engage directly with the index and data providers to ensure better analytics and stability in ESG metrics. Engagement with companies in which we invest our clients’ assets occurs at multiple levels within BlackRock. Where investment teams choose to leverage engagement, this can take a variety of forms but, in essence, the portfolio management team would seek to have regular and continuing dialogue with executives or board directors of engaged investee companies to advance sound governance and sustainable business practices targeted at the identified ESG characteristics and principal adverse indicators, as well as to understand the effectiveness of the company’s management and oversight of activities designed to address the identified ESG issues. Engagement also allows the portfolio management team to provide feedback on company practices and disclosures.

The Fund does not use a reference benchmark for the purposes of attaining the ESG characteristics that it promotes. Whilst the Fund seeks to track the performance of the Bloomberg Barclays Developed Market Corporate Index, the environmental and/or social characteristics promoted by the Fund are achieved through the application of the Fund's ESG policy.

B. No sustainable investment objective

This Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.

The Fund does not commit to investing in sustainable investments.

C. Environmental or social characteristics of the financial product

The Fund promotes environmental characteristics related to the reduction of non-renewable natural resource utilisation and pollution by excluding direct investments in companies involved in, for example, thermal coal extraction, thermal coal based power generation, production of tar sands (also known as oil sands) and involved in severe controversies relating to, for example, biodiversity and land use, and water stress.

The Fund promotes social characteristics related to (a) reduction of the availability of weapons by excluding direct investment in companies involved in the production of controversial weapons (including, but not limited to, cluster munitions, biologicalchemical, landmine, depleted uranium, blinding laser or incendiary weapons), or involved in the production of nuclear weapons or nuclear weapon delivery platforms or the provision of auxiliary services related to nuclear weapons), or involved in the production of firearms intended for retail to civilians or retail of firearms intended for civilian use that, in the Investment Manager’s assessment (which may rely on one or more external sources), is material in the context of the Fund’s ESG principles, (b) better health and well-being by excluding direct investment in companies involved in, for example, tobacco production and supply of tobacco related products, and (c) support for human rights, labour standards, the environment and anti-corruption by excluding direct investment in issuers deemed to have failed to comply with the UN Global Compact Principles.

The definition of “involved” in relation to each activity may be based on generating or deriving a revenue from the activity that exceeds a percentage of revenue or a defined total revenue threshold, or any exposure to the activity regardless of the amount of revenue received. The activity may relate to production or distribution or both.

D. Investment strategy

The investment objective of the BlackRock for Formue Corporate Bond Index Fund (the “Fund” for the purposes of the section of the Supplement entitled “Investment Objectives and Policies for the BlackRock for Formue Corporate Bond Index Fund) is to provide a total return, taking into account both capital and income returns, which reflects the total return of the Bloomberg Global Agg Corporate ex-EM (unhedged in NOK) (the “Benchmark Index”).

In order to achieve this investment objective and, subject to the investment restrictions in Appendix D of the Prospectus, the investment policy of the Fund is to invest in a portfolio of fixed income securities that as far as possible and practicable consists of the component securities of the Benchmark Index, but excluding securities of issuers that do not comply with the Fund’s ESG Policy as described in the section headed “Additional Information: ESG Policy” below. The fixed income securities which the Fund will invest in will be issued in global developed markets by corporate issuers, government or government-related issuers (including governments, foreign agencies, supranational bodies and local authorities). Such fixed income securities will be investment grade (or, where unrated, deemed by the Investment Manager to be of an equivalent rating). If the credit ratings of such fixed income securities are downgraded, the Fund may continue to hold the downgraded fixed income securities for a period of time, at the discretion of the Investment Manager, in order to avoid a distressed sale of the downgraded security. The Fund may invest in “green bonds” that comply with the International Capital Markets Association’s Green Bond Principles (as defined by the corresponding proprietary methodology which is guided by the International Capital Markets Association Green Bond Principles, and which are evaluated under certain criteria as follows: 1) stated use of proceeds (i.e. that the proceeds promote the transition to a low-carbon economy or other environmental sustainability purposes); 2) process for project evaluation and selection (i.e. that there is clear delineation of the environmental objectives of the projects being funded); 3) process for management of proceeds (i.e. that a formal process to apply the proceeds to an eligible use be disclosed); and 4) commitment to ongoing reporting (i.e. commitment to regular reporting on projects, both prior to and post allocation of proceeds)). The Fund intends to use optimisation techniques in order to achieve a similar return to the Benchmark Index and it is therefore not expected that the Fund will hold each and every underlying constituent of the Benchmark Index at all times or hold them in the same proportion as their weightings in the Benchmark Index.

The Investment Manager may, in addition to the investment criteria set out above, exclude the direct investment in certain issuers. These excluded issuers may be based on the recommendations made by Norges Bank Investment Management following an ethical assessment of such issuers based on their products or on their conduct. These exclusions are not used for attaining the environmental and/or social characteristics promoted by the Fund. Further details are available from the Investment Manager on request. As a result of the application of any such exclusions and the use of optimisation techniques referred to above, the Fund’s risk profile and return may deviate from the risk profile and return of the Benchmark Index.

The Fund’s investments will normally be listed and traded on Regulated Markets globally but may alternatively be listed and traded on other Regulated Markets as set out in Appendix F of the Prospectus.

In addition, the Fund may, subject to the restrictions set out in Appendix D of the Prospectus, for liquidity and other ancillary purposes, invest in cash and/or cash equivalents (such as term deposits and bank certificates). During an initial period of no more than one month from the launch date of the Fund (the “Initial Period”), the Fund may hold a significant proportion of its assets in cash and cash equivalents, money market instruments (including certificates of deposit, commercial paper and bankers acceptances) and money market funds though it is expected that the Fund’s relative exposure to these assets will decrease over the course of the Initial Period. As a result, there may be a higher than usual tracking difference between the Fund and the Benchmark Index during the Initial Period.

In order to assist in achieving its investment objective, the Fund may also, subject to the restrictions set out in Appendix D of the Prospectus, invest up to 10% of its Net Asset Value in other CIS, which may include money market funds for liquidity management purposes, and/or CIS which are exposed to investments that are similar to the Fund’s investments, where investing in such CIS may be more efficient from a cost and timing perspective than direct investment in fixed income and fixed income-related securities. These CIS may be listed or traded on the Regulated Markets set out in Appendix F of the Prospectus.

The Fund may hold some securities which are not underlying constituents of the Benchmark Index where such securities provide similar performance (with matching risk profile) to certain securities that make up the Benchmark Index. It is not expected that the Fund will hold all constituents of the Benchmark Index.

In cases where the Investment Manager invests in securities that are not constituents of the Benchmark Index, these will be selected by the Investment Manager based on its determination, in light of current market conditions and taking due account of its assessment of liquidity, of the most cost-effective manner of generating a return that tracks the return of the Benchmark Index.

The Fund may invest in FDI for efficient portfolio management and/or direct investment purposes (please refer to Appendix C of the Prospectus for further information) to assist in achieving its investment objective, to gain exposure to the bonds described above and for currency hedging purposes.). Where the Fund invests in FDI, it shall do so within the limitations specified in Appendix C of the Prospectus (subject to the conditions and within the limits laid down by the Central Bank). The FDI may be dealt OTC or be listed or traded on the Regulated Markets set out in Appendix F of the Prospectus and may include futures, currency forwards and total return swaps. The reference assets underlying the total return swaps, if any, shall be any security, basket of securities or eligible indices which are consistent with the investment policy of the Fund which are expected to include, without limitation, fixed income indices giving access to fixed income securities of companies domiciled globally. Details of fixed income indices utilised by the Fund will be provided in the annual report of the Company. The Fund may also engage in short-term secured lending of its investments to third parties as a means of generating additional income (as set out in Appendix C of the Prospectus and on the basis set out in Appendix I of the Prospectus).

The binding elements of the investment strategy are as follows:
Subject to investing in such assets as required for the Fund to meet its investment objective and policy, the Fund will promote its environmental and social characteristics by excluding direct investment in issuers which are involved in the following activities:
- deriving more than 5% of revenue from thermal coal extraction and thermal coal-based power generation, with the exception of “green bonds” that are considered to comply with the International Capital Markets Association’s Green Bond Principles, from such issuers;
- deriving more than 5% of revenue from production of tar sands (also known as oil sands);
- production of controversial weapons (including, but not limited to, cluster munitions, landmines, depleted uranium weapons, biological-chemical weapons, blinding lasers and incendiary weapons as defined by the methodology of the MSCI Ex-Controversial Weapons Indexes);
- production of nuclear weapons or nuclear weapon delivery platforms or the provision of auxiliary services related to nuclear weapons;
- production or deriving more than 5% of revenue from distribution of firearms intended for retail to civilians;
- production of tobacco products or deriving more than 5% of revenue from distribution of tobacco related products;
deemed to have failed to comply with the UN Global Compact Principles; and
severe controversies (based on very severe business controversies as defined by a third party ESG data provider).

The definition of “involved” in relation to each activity may be based on generating or deriving a revenue from the activity that exceeds a percentage of revenue or a defined total revenue threshold, or any exposure to the activity regardless of the amount of revenue received. The activity may relate to production or distribution or both.

Consideration of principal adverse impacts (PAIs) on sustainability factors

The Fund takes into consideration principal adverse impacts on sustainability factors by tracking the Benchmark Index which incorporates certain ESG criteria in the selection of index constituents. The Investment Manager has determined that those principal adverse impacts (PAIs) listed below are considered as part of the selection criteria of the Benchmark Index at each index rebalance:
• Share of investments in companies active in the fossil fuel sector.
• Share of investments in investee companies that have been involved in violations of the UNGC principles or OECD Guidelines for Multinational Enterprises.
• Share of investments in investee companies involved in the manufacture or selling of controversial weapons.

The Fund's annual report will include information on the principal adverse impacts on sustainability factors set out above.

Good governance policy

Governance checks are incorporated into the Fund’s strategy by way of excluding issuers based on an ESG controversy score (which measures an issuers’ involvement in ESG related controversies to identify issuers which may not have satisfactory governance practices in relation to key performance indicators (KPIs) related to sound management structure, employee relations, remuneration of staff and tax compliance) and also the exclusion of issuers that are classified as violating United Nations Global Compact principles.

E. Proportion of Investments

The Fund seeks to invest in a portfolio of securities that as far as possible and practicable consists of the component securities of the Benchmark Index and comply with the Fund's ESG Policy.

It is expected that at least 80% of the Fund’s assets will be invested in investments that are aligned with environmental and/or social characteristics promoted by the Fund. In the event that any investments cease to comply with the Fund’s ESG policy, the Investment Manager will liquidate the position as soon as it is possible and practicable (in the Investment Manager’s view) to do so.

The Fund may invest up to 20% of its assets in other investments.

The Fund may use derivatives for investment purposes and for the purposes of efficient portfolio management in connection with the environmental or social characteristics promoted by the Fund. Where the Fund uses derivatives for promoting environmental or social characteristics, any ESG rating or analyses referenced above will apply to the underlying investment.

This Fund does not currently commit to investing more than 0% of its assets in investments in environmentally sustainable economic activities within the meaning of the Taxonomy Regulation.

The Fund does not currently commit to invest in fossil gas and/or nuclear energy related activities that comply with the EU Taxonomy, however, these investments may form part of the portfolio.

This Fund does not currently commit to investing more than 0% of its assets in investments in transitional and enabling activities within the meaning of the Taxonomy Regulation.

The Fund does not commit to investing in sustainable investments with an environmental objective.

This Fund does not currently commit to investing more than 0% of its assets in investments in socially sustainable investments.

Other holdings may include cash, money market funds and derivatives. Such investments may only be used for the purpose of efficient portfolio management, except for derivatives used for currency hedging for any currency hedged share class.

Any ESG exclusionary criteria applied by the Investment Manager will apply only to the derivatives relating to individual issuers used by the Fund. Derivatives based on financial indices, interest rates, or foreign exchange instruments will not be considered against minimum environmental or social safeguards.

F. Monitoring of enviromental or social characteristics

Ongoing product integrity monitoring

The Fund seeks to invest in a portfolio of securities that as far as possible and practicable consists of the component securities of the Benchmark Index and comply with the Fund’s ESG Policy. The environmental and/or social characteristics which the Fund seeks to promote are incorporated within the Fund’s ESG policy and the Fund is managed in a manner that seeks to identify exceptions to the Fund’s ESG policy. In the event that any investments cease to comply with the Fund’s ESG policy, the Investment Manager will liquidate the position as soon as it is possible and practicable (in the Investment Manager’s view) to do so.

BlackRock monitors Fund and index-level data to track the Fund’s adherence to these characteristics as at each rebalance.

BlackRock also monitors the tracking error of the Fund and reports this to investors as part of the annual and semi-annual report and accounts. Information on the anticipated tracking error is also published in the Fund’s prospectus.

G. Methodologies

The Fund seeks to invest in a portfolio of securities that as far as possible and practicable consists of the component securities of the Benchmark Index and comply with the Fund’s ESG policy (outlined above in Section C and detailed in section L).

Methodologies

In addition, the following methodologies are used to measure how the social or environmental characteristics promoted by the Fund are met:

The Benchmark Index uses Sustainalytics Business involvement and UNGC screens. For further information, please see the index methodology.

The Benchmark Index uses MSCI ESG controversy data. For further information, https://www.msci.com/documents/10199/acbe7c8a-a4e4-49de-9cf8-5e957245b86b

H. Data sources and processing

Data Sources

BlackRock Portfolio Managers have access to research, data, tools, and analytics to integrate ESG insights into their investment process. Aladdin is the operating system that connects the data, people, and technology necessary to manage portfolios in real time, as well as the engine behind BlackRock’s ESG analytics and reporting capabilities. BlackRock’s Portfolio Managers use Aladdin to make investment decisions, monitor portfolios and to access index information that informs the investment process to attain ESG characteristics of the Fund.

ESG datasets are sourced from external third-party data providers and index providers, including but not limited to MSCI, Sustainalytics, Refinitiv, S&P and Clarity AI. These datasets may include headline ESG scores, carbon emissions data, business involvement metrics or controversies and have been incorporated into Aladdin tools that are available to Portfolio Managers and employed in BlackRock investment strategies. Such tools support the full investment process, from research, to portfolio construction and modelling, to reporting.

Measures taken to ensure Data Quality

BlackRock applies a comprehensive due diligence process to evaluate provider offerings with highly targeted methodology reviews and coverage assessments based on the sustainable investment strategy (and the environmental and social characteristics or sustainable investment objective) of the product. Our process entails both qualitative and quantitative analysis to assess the suitability of data products in line with regulatory standards as applicable.

We assess ESG providers and data across five core areas outlined below:
1. Data Collection: this includes but is not limited to assessing the data providers underlying data sources, technology used to capture data, process to identify misinformation and any use of machine learning or human data collection approaches. We will also consider planned improvements.
2.Data Coverage: our assessment includes but is not limited to the extent to which a data package provides coverage across our investible universe of issuers and asset classes. This will include consideration of the treatment of parent companies and their subsidiaries as well as use of estimated data or reported data.
3. Methodology: our assessment includes but is not limited consideration of the third-party providers methodologies employed, including considering the collection and calculation approaches, alignment to industry or regulatory standards or frameworks, materiality thresholds and their approach to data gaps.
4. Data Verification: our assessment will include but is not limited to the third-party providers approach to verification of data collected and quality assurance processes including their engagement with issuers.
5. Operations: we will assess a variety of aspects of a data vendors’ operations, including but not limited to their policies and procedures (including consideration of any conflicts of interest) the size and experience of their data research teams, their training programs, and their use of third-party outsourcers.

Additionally, BlackRock, actively participates in any relevant provider consultations regarding proposed changes to methodologies as it pertains to third party data sets or index methodologies and submits comprehensive feedback and recommendations to data provider technical teams. BlackRock often has ongoing engagement with ESG data providers including index providers to keep abreast of industry developments.

How data is processed

At BlackRock, our internal processes are focused on delivering high-quality standardised and consistent data to be used by investment professionals and for transparency and reporting purposes. Data, including ESG data, received through our existing interfaces, and then processed through a series of quality control and completeness checks which seeks to ensure that data is high-quality data before being made available for use downstream within BlackRock systems and applications, such as Aladdin. BlackRock’s integrated technology enables us to compile data about issuers and investments across a variety of environmental, social and governance metrics and a variety of data providers and make those available to investment teams and other support and control functions such as risk management.

Use of Estimated Data

BlackRock strives to capture as much reported data from companies via 3rd party data providers as practicable, however, industry standards around disclosure frameworks are still evolving, particularly with respect to forward looking indicators. As a result, in certain cases we rely on estimated or proxy measures from data providers to cover our broad investible universe of issuers. Due to current challenges in the data landscape, while BlackRock relies on material amount of estimated data across our investible universe, the levels of which may vary from data set to data set, we seek to ensure that use of estimates is in line with regulatory guidance and that we have necessary documentation and transparency from data providers on their methodologies. BlackRock recognizes the importance in improving its data quality and data coverage and continues to evolve the data sets available to its investment professionals and other teams. Where required by local country-level regulations, funds may state explicit data coverage levels. BlackRock seeks to understand the use of estimated data in index methodologies and ensure that their approaches are robust and in line with applicable regulatory requirements and index methodologies.

I. Limitations to methodologies and data

Limitations to Methodology

Sustainable investing is an evolving space, both in terms of industry understanding but also the regulatory frameworks on both a regional and global basis. BlackRock continues to monitor developments in the EU's ongoing implementation of its framework for sustainable investing and its investment methodologies seeking to ensure alignment as the regulatory environment changes. As a result, BlackRock may update these disclosures, and the methodologies and sources of data used, at any time in the future as market practice evolves or further regulatory guidance becomes available.

Limitations to Data

ESG data sets are constantly changing and improving as disclosure standards, regulatory frameworks and industry practice evolve. BlackRock continues to work with a broad range of market participants to improve data quality.

Whilst each ESG metric may come with its own individual limitations, data limitations may broadly be considered to include, but not be limited to:
• Lack of availability of certain ESG metrics due to differing reporting and disclosure standards impacting issuers, geographies, or sectors.
• Nascent statutory corporate reporting standards regarding sustainability leading to differences in the extent to which companies themselves can report against regulatory criteria and therefore some metric coverage levels may be low.
• Inconsistent use and levels of reported vs estimated ESG data across different data providers, taken at varied time periods which makes comparability a challenge.
• Estimated data by its nature may vary from realized figures due to the assumptions or hypothesis employed by data providers.
• Differing views or assessments of issuers due to differing provider methodologies or use of subjective criteria.
• Most corporate ESG reporting, and disclosure takes place on an annual basis and takes significant time to produce meaning that this data is produced on a lag relative to financial data. There may also be inconsistent data refresh frequencies across different data providers incorporating such data into their data sets.
• Coverage and applicability of data across asset classes and indicators may vary.
• Forward looking data, such as climate related targets may vary significantly from historic and current point in time metrics.

For more information about how metrics that are presented with sustainability indicators are calculated, please see the Fund's annual report.

Sustainable Investments and Environmental and Social criteria

Sustainable investing and understanding of sustainability is evolving along with the data environment. Industry participants, including data providers face challenges in identifying a single metric or set of standardized metrics to provide a complete view on a company or an investment. BlackRock has therefore established a framework to identify sustainable investments, taking into account the regulatory requirements and index provider methodologies.

BlackRock leverages third-party index provider methodologies and data in assessing whether investments cause significant harm and have good governance practices. There may be some circumstances where data is unavailable, incomplete, or inaccurate. Despite reasonable efforts, information may not always be available in which case an assessment will be made by the index provider based on their knowledge of the investment or industry. In certain cases, data may reflect actions that issuers may have taken only after the fact, and do not reflect all potential instances of significant harm.

BlackRock undertakes thorough due diligence on index provider sustainable investment methodologies to ensure that they align with BlackRock’s views on Sustainable Investments.

J. Due Diligence

BlackRock applies a high standard of due diligence in the selection and ongoing monitoring of investments made by the Fund for the purpose of compliance with the investment, liquidity and risk guidelines of the Fund, as well as the sustainability risk and ESG criteria and general performance.

K. Engagement Policies

The Fund

The Fund does not use engagement as a means of meeting its binding commitments to environmental or social characteristics or sustainable investment objectives. The Investment Manager does not perform direct engagement with the companies / issuers within the index but does engage directly with the index and data providers to ensure better analytics and stability in ESG metrics.

General

Engagement with companies in which we invest our clients’ assets occurs at multiple levels within BlackRock.

Where engagement is specifically identified by a particular portfolio management team as one of the means by which they seek to demonstrate a commitment to environment, social and governance issues within the context of SFDR, the methods by which the effectiveness of such engagement policy and the ways in which such an engagement policy may be adapted in the event that they do not achieve the desired impact (usually expressed as a reduction in specified principal adverse indicators) would be described in the prospectus and website disclosures particular to that fund.

Where investment teams chooses to leverage engagement, this can take a variety of forms but, in essence, the portfolio management team would seek to have regular and continuing dialogue with executives or board directors of engaged investee companies to advance sound governance and sustainable business practices targeted at the identified ESG characteristics and principal adverse indicators, as well as to understand the effectiveness of the company’s management and oversight of activities designed to address the identified ESG issues. Engagement also allows the portfolio management team to provide feedback on company practices and disclosures.

Where a relevant portfolio management team has concerns about a company’s approach to the identified ESG characteristics and/or principal adverse indicators, they may choose to explain their expectations to the company’s board or management and may signal through voting at general meetings that they have outstanding concerns, generally by voting against the re-election of directors they view as having responsibility for improvements in the identified ESG characteristics or principal adverse indicators.

Separate from the activities of any particular portfolio management team, at the highest level, as part of its fiduciary approach, BlackRock has determined that it is in the best long-term interest of its clients to promote sound corporate governance as an informed, engaged shareholder. At BlackRock, this is the responsibility of BlackRock Investment Stewardship. Principally through the work of BIS team, BlackRock meets the requirements in the Shareholder Rights Directive II (‘SRD II”) relating to engagement with public companies and other parties in the investment ecosystem. A copy of BlackRock’s SRD II engagement policy can be found at https://www.blackrock.com/corporate/literature/publication/blk-shareholder-rights-directiveii-engagement-policy-2022.pdf.

BlackRock’s approach to investment stewardship is outlined in the BIS Global Principles and market-level voting guidelines. The BIS Global Principles set out our stewardship philosophy and our views on corporate governance and sustainable business practices that support long-term value creation by companies. We recognize that accepted standards and norms of corporate governance differ between markets; however, we believe there are certain fundamental elements of governance practice that are intrinsic globally to a company’s ability to create long-term value. Our market-specific voting guidelines provide detail on how BIS implements the Global Principles – taking into consideration local market standards and norms – and inform our voting decisions in relation to specific ballot items for shareholder meetings. BlackRock’s overall approach to investment stewardship and engagement can be found at: https://www.blackrock.com/uk/professionals/solutions/shareholder-rights-directive and https://www.blackrock.com/corporate/about-us/investment-stewardship

In undertaking its engagement, BIS may focus on particular ESG themes, which are outlined in BlackRock’s voting priorities https://www.blackrock.com/corporate/literature/publication/blk-stewardship-priorities-final.pdf

I. Designated reference benchmark

There is no specific index designated as a reference benchmark to determine whether this financial product is aligned with the environmental and/or social characteristics that it promotes. However, whilst the Fund seeks to track the performance of the Bloomberg Global Agg Corporate ex-EM Index, the environmental and/or social characteristics promoted by the Fund are achieved through the application of the Fund's ESG Policy.