BlackRock Global Impact Report 2022/23
Welcome to the BlackRock Fundamental Equity Impact Investing team’s latest annual report, marking three years since the inception of our first impact strategy in public equities. It is our ongoing commitment to share the progress we and our investee companies have made over time toward generating measurable societal and environmental outcomes.
Key takeaways
01
Engagements in action
This year’s report highlights specific examples of engagements with our portfolio companies from the past year. These interactions aimed to help them edge closer to our common goal of solving for the world’s most pressing societal and environmental issues.
02
Impact on people: solutions spotlight
The Global Impact team invests in companies whose core products and services address great societal issues as identified by the UN Sustainable Development Goals and Targets.
03
Impact on the planet: solutions spotlight
The Global Impact team invests in companies whose core products and services address great environmental issues as identified by the UN Sustainable Development Goals and Targets.
Generating an impact on people and the planet
Given the magnitude of the world’s needs and their increased urgency, we believe impact investing has a more important role than ever. BlackRock is excited to release the Global Impact Report 2022/23, its third annual publication which exhibits impact enterprises offering solutions to the immense challenges facing our planet and society. As we look ahead, we are encouraged by the tremendous opportunity to deploy capital and strategic resources into impact investing to help solve some of the world’s great challenges as identified by the UN Sustainable Development Goals (SDGs) and Targets.
We strategically engage with companies to help enhance their impact
Part of our theory of change involves seeking ways to support and guide our investee companies so that they might deliver greater net outcomes. To this end, we help our partner companies deepen their awareness of their impact, better manage their impact outcomes, improve their data provision and transparency, increase their visibility and their narratives as impact companies, and manage such overarching issues as climate change and the transition to a lower-carbon economy. Although every company is on a unique journey, many of the issues or opportunities they face share common factors. A first engagement may be initiated at any point before or during our investment (and may even continue after we are no longer invested), with many impact engagements involving multiple stages and facets.
Engagements inform our investment decisions and can reinforce conviction about a particular investment. An engagement may prompt a decision to add to a position or might lead the team to reduce exposure or redesign its engagement approach.
Engagement examples
Helped a cash remittance business to embed and protect its intentional social impact. We brainstormed how it can best protect its impact ethos as it expands globally, uncovering ways it could invest its cash deposits sustainably, and suggesting improved impact-metrics disclosure (tied to the GIIN Taxonomy) and ways to elevate its profile as an impact company. (Impact objective: knowledge-sharing & visibility)
Guided an education company in building its cross-functional impact strategy. We introduced the concept of impact measurement and management (IMM), suggested a range of relevant metrics for its annual report to increase transparency of impact and sustainability efforts. We uncovered pain points, including regulatory barriers to growing a cross-border business and to providing services to the public sector. The company is keen to meet with other leaders tackling similar issues and we are preparing to facilitate those discussions as a next step. (Impact objective: knowledge-sharing, data provision & risk-reduction)
Consulted on impact with a disability employment services provider before its IPO. We provided advice on the company’s long-term impact strategy and discussed relevant impact measurements and data points to track outcomes after listing with the objective of helping to elevate its profile as an impact company in the public markets. (Impact objective: knowledge-sharing & data provision)
Impact on people: Solutions spotlight on Palo Alto Networks
When it comes to virtual interactions, the ongoing digitization of our lives means the importance of security against cyberattacks grows daily. A recent report predicts the global cost of cybercrime will hit US$8 trillion in 2023 and grow to US$10.5 trillion by 2025.1 Palo Alto Networks is a multinational cybersecurity company. Its core product is a platform that includes advanced firewalls and cloud-based offerings. The company prepares enterprises, organizations, service providers and government entities to protect themselves against today’s most sophisticated cyber threats. This is done by delivering value in five fundamental areas: Network Security, Secure Access Service Edge, Cloud Security, Security Operations, and Threat Intelligence and Security Consulting. Its cybersecurity platforms and services help secure enterprise users, networks, clouds, and endpoints by delivering comprehensive cybersecurity powered by leading artificial intelligence (AI) and automation.2 Their software also helps secure the growing legions of remote and hybrid workers after the pandemic.
SDG 9
Seek to build resilient infrastructure, promote sustainable industrialization and foster innovation.
Target 17.16
Enhance the global partnership for sustainable development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the sustainable development goals in all countries, in particular developing countries.
Impact on the planet: Solutions spotlight on Trimble
Although no human being can survive without proper nutrition, food scarcity and limited access to clean water continue to be an everyday challenge for many, especially in developing regions. Almost one in 10 people globally are undernourished, and more than 3 billion can’t afford a healthy diet, according to the Food and Agriculture Organization (FAO).3 In addition, since 2020, the sharp increase in global consumer food prices has translated directly into the increased average cost of a healthy diet everywhere.4 Trimble is a U.S.-based software, hardware and services technology company supporting agriculture industries worldwide, among other sectors. The company provides advanced software such as automation equipment and operating systems for agricultural machinery. Its products allow for a more efficient farming process – which ultimately helps make food production more sustainable – because they help automate historically labor-intensive farming activities.
Target 2.3
By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land.
Target 12.4
By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle, in accordance with agreed international frameworks, and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment.
