By Type
By Asset Class
ETF EDUCATION
Adviser Centre
Forms & documents
The BlackRock Australia website ("Website") including BlackRock Accounts Online and Gateway are owned and operated by BlackRock Investment Management (Australia) Limited (ABN 13 006 165 975) having its registered office at Level 34, Olderfleet, 447 Collins Street, Melbourne, VIC, 3000.
The Website including BlackRock Accounts Online and Gateway covers the products and services of BlackRock Investment Management (Australia) Limited ("BlackRock Australia").
By using and accessing the Website or any of its pages, you agree to be legally bound by these Terms of Use (including the Privacy Policy) detailed below.
We may change the content or services on the Website without notice including the Terms of Use and the Privacy Policy. Your continued access to, or use of, the Website means that you agree to and accept the changes we make. We recommend that you periodically review the Terms of Use and Privacy Policy for changes.
The information provided on the Website is prepared for residents of Australia only and should not be relied upon by residents of any other jurisdiction.
Click on a topic title below to jump directly to the relevant section.
Alternatively, use the scroll-bar to browse the document.
Use of BlackRock Accounts Online
Use of Gateway
No Financial Product Advice
Accuracy and Currency of Information
Performance and Returns
Investing on Current Offer Documents
IDPS Accessible Funds
iShares ETFs
Return of Capital and Performance
Important Information from index providers
Distribution Summary and Fund Payment Information
Indemnity
Password
Copyright and Trademarks
Interactive Data Real Time Services
Morningstar web tools
Loss or Damage to your Systems
Links to, and from, other Sites
Use of BlackRock Accounts Online
Users of BlackRock Accounts Online ("User") will be able to access information, which will be controlled by a Unique Identifier and Password. This is to allow us to implement measures to preserve the security of this information.
Use of BlackRock Accounts Online is subject to specific terms and conditions in addition to the general Terms of Use. By accessing BlackRock Accounts Online you are deemed to have read, understood and agreed to the following terms and conditions:
1. I acknowledge that I have read these Terms of Use and the Privacy Policy
2. I agree not to disclose my Unique Identifier and Password to any other person and notify BlackRock Australia immediately of any unauthorised access to, or use of my Unique Identifier and Password.
3. I agree to be responsible for the use by others of my Unique Identifier and Password.
4. I acknowledge that information in BlackRock Accounts Online relating to me or my clients (where relevant) will be disclosed to any User using a valid Unique Identifier and Password whether or not such use is authorised by me. Once access is granted, all actions will be deemed to be made by me.
5. I warrant that any information entered by me using my Unique Identifier and Password is accurate.
6. I acknowledge that my access to BlackRock Accounts Online may be revoked by BlackRock at any time without notice.
7. I agree to indemnify BlackRock Australia and its related body corporate and all other Users of BlackRock Accounts Online against any claim, loss, cost, damage, action or expense which BlackRock Australia or its related body corporate, or any other User of BlackRock Accounts Online may experience arising from:
(a) my use of BlackRock Accounts Online,
(b) my failure to keep my Password confidential, and
(c) the use of BlackRock Accounts Online by any other person on my behalf.
Use of Gateway
Users of Gateway ("User") will be able to access information on Gateway, which will be controlled by a Unique Identifier and Password selected by the User. This is to allow us to implement measures to preserve the security of this information. BlackRock Australia will not have access to the Password selected by the User.
Use of Gateway is subject to specific terms and conditions in addition to the general Terms of Use. By accessing Gateway you are deemed to have read, understood and agreed to the following terms and conditions:
1. I acknowledge that I have read these Terms of Use and the Privacy Policy.
2. I agree not to disclose my Unique Identifier and Password to any other person and notify BlackRock Australia immediately of any unauthorised access to, or use of my Unique Identifier and Password.
3. I agree to be responsible for the use by others of my Unique Identifier and Password.
4. I acknowledge that information in Gateway relating to me or my clients (where relevant) will be disclosed to any User using a valid Unique Identifier and Password whether or not such use is authorised by me. Once access is granted, all actions will be deemed to be made by me.
5. I warrant that any information entered by me using my Unique Identifier and Password is accurate.
6. I acknowledge that my access to Gateway may be revoked by BlackRock Australia at any time without notice.
7. I agree to indemnify BlackRock Australia and its related body corporate and all other Users of Gateway against any claim, loss, cost, damage, action or expense which BlackRock Australia or its related body corporate, or any other User of Gateway may experience arising from:
(a) my use of Gateway;
(b) my failure to keep my Password confidential; and
(c) the use of Gateway by any other person on my behalf.
No Financial Product Advice
The material on the Website provides general information only and has not been prepared having regards to your objectives, financial situation or needs. Before making an investment decision, you need to consider whether this information is appropriate to your objectives, financial situation or needs. Any potential investor should consider the latest disclosure document or PDS in deciding whether to acquire, or to continue to hold, an investment in any BlackRock fund. You should seek independent professional legal, financial, taxation, and/or other professional advice before making an investment decision.
Accuracy and Currency of Information
BlackRock Australia, its officers, employees, agents and associates believe that the information and material provided on the Website is correct at the time of compilation but do not warrant the accuracy, reliability or currency of that information and material. You should carefully check the date of compilation of the information and material (where relevant) to determine its currency. Save for statutory liability which cannot be excluded, BlackRock Australia, its officers, employees, agents, related body corporate and associates disclaim all responsibility for any loss or damage which any person may suffer from reliance on the information and material on the Website or any opinion, conclusion or recommendation in the information and material whether the loss or damage is caused by any fault or negligence on the part of BlackRock Australia (including its officers, employees, agents, related body corporate and associates) or otherwise.
Performance and Returns
All performance figures contained in the Website are sourced from internal and other sources as appropriate. Past performance is not a reliable indicator of future performance. The value of investments and the income from them may go down as well as up and are not guaranteed.
Investing on Current Offer Documents
BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 (AFS Licence No 230523) ("BlackRock Australia") is the responsible entity for the Australian managed investment funds (including the Australian iShares ETFs, see section titled “iShares ETFs” below for further information) registered under the Corporations Act 2001 offered by BlackRock Australia. BlackRock Australia is the local agent and intermediary for the international iShares ETFs (see section titled “iShares ETFs” below for further information), issued by iShares, Inc. ARBN 125632 279 formed in Maryland, USA and iShares Trust ARBN 125 632 411 organised in Delaware, USA ("International iShares ETFs”). The international iShares ETFs are registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940.
Investments into any fund detailed on the Website may only be made on the basis of an application form contained in, or accompanying a current Product Disclosure Statement (PDS), Disclosure Document/Information Memorandum or Prospectus (collectively “Offer Documents”). Offer Documents for any BlackRock Australia fund detailed on the Website are available from BlackRock Australia, or, in certain circumstances, can be downloaded from the Website as a PDF file. You should consider the relevant Offer Document in deciding whether to acquire or to continue to hold the product. If you would like a printed paper copy of an Offer Document, please call us on 1300 366 100 or alternatively, where available, you can download an electronic PDF copy from the website.
Offer Documents on this website are only intended for use by Australian residents. They have been prepared under Australian law and do not directly or indirectly amount to an offer in any other place other than Australia.
IDPS Accessible Funds
Interests in certain funds are accessible through investor directed portfolio services ("IDPS Accessible Funds") and are offered in a PDS available on the Website. Please read and consider the relevant PDS carefully before deciding to invest. Please note that persons intending to invest in the IDPS Accessible Funds will need to complete the applicable forms for the relevant service.
iShares ETFs
Generally, units/shares of iShares ETFs may only be created or redeemed directly from an iShares ETF by authorised participants (typically large institutional investors) in very large creation/redemption sizes. Other investors wishing to access iShares ETFs may do so via each fund’s listing on a market of the Australian Securities Exchange ("ASX") through a brokerage account. Transaction costs are incurred when buying or selling iShares ETF securities on ASX markets and brokerage commissions if such trades are done through a broker. iShares securities trade on ASX at market price (not at net asset value ("NAV")). Before investing in an iShares ETF, you should carefully consider whether such products are appropriate for you, read the applicable Offer Document, which are available from BlackRock Australia or can be downloaded from the Website in PDF format, and consult a financial or other professional adviser.
In respect of information relating to iShares ETFs listed on a market of the ASX, ASX takes no responsibility for any aspect of the Website or any decision to invest in an iShares ETFs. The admission by ASX of an issuer of an iShares ETF is in no way an endorsement by ASX of the issuer or of iShares ETF securities.
BlackRock Fund Advisors ("BFA") serves as an advisor to the International iShares ETFs. BFA is a subsidiary of BlackRock Institutional Trust Company, N.A. ("BTC"). BTC is a wholly-owned subsidiary of BlackRock, Inc®. Information regarding foreign companies is provided solely to inform Australian residents of the role each of these foreign companies have in the International iShares ETFs listed on the ASX. Content is general in nature only.
Trades on the ASX in the shares of International iShares ETFs are settled using CHESS Depositary Interests. An investment in an International iShares ETF involves investing in international markets. In addition to the normal investment risks associated with investment type products, international investments may involve the risk of losing all or part of any capital from unfavourable fluctuations in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. An investment in emerging markets and single countries may also involve heightened other risks such as increased volatility and the possibility of lower trading volume.
Return of Capital and Performance
None of BlackRock Australia, their associates, related body corporate and subsidiaries guarantees the success of any fund, or repayment of capital nor any particular rate of return on income or of capital. Investment type products are subject to investment risk, including delays in repayment.
Important Information from Index Providers
BlackRock funds are not sponsored, endorsed, issued, sold or promoted by ASX Operations Pty Limited (including its affiliates), Bloomberg Finance L.P. and its affiliates (“Bloomberg”), Barclays Capital Inc., FTSE International Limited (“FTSE”), JPMorgan Chase & Co., MSCI Inc. ("MSCI"), Markit Indices Limited, Morningstar, Inc., National Association of Real Estate Investment Trusts (“NAREIT”), Russell Investment Group ("Russell"), Standards & Poor’s ("S&P"), S&P Dow Jones Indices LLC, or The McGraw-Hill Companies, Inc. ("McGraw-Hill"). None of these companies make any representation or warranty regarding the advisability of investing in any BlackRock fund. BlackRock group of companies are not affiliated with the companies listed above. Index data related to the underlying indices are provided by the respective index companies listed above.
Neither FTSE nor NAREIT makes any warranty regarding the FTSE NAREIT Real Estate 50 Index, FTSE NAREIT All Residential Capped Index or FTSE NAREIT All Mortgage Capped Index; all rights vest in NAREIT. Neither FTSE nor NAREIT makes any warranty regarding the FTSE EPRA/NAREIT Developed Real Estate ex-U.S. Index, FTSE EPRA/NAREIT Developed Europe Index or FTSE EPRA/NAREIT Global REIT Index; all rights vest in FTSE, NAREIT and EPRA. The FTSE China 50 Index is calculated by FTSE.
“FTSE®” is a trademark of London Stock Exchange Group companies and is used by FTSE under license. MSCI and the MSCI Index are trademarks and servicemarks of MSCI. Standard & Poor's® and S&P® are registered trademarks of S&P, a division of McGraw-Hill. ASX® is a registered trademark of ASX Operations Pty Limited and has been licensed for use to S&P. The "Russell Index" is a trademark of Russell. Each of these companies has licensed the use of their respective trademarks and servicemarks to BlackRock Institutional Trust Company, N.A.
Bloomberg is not affiliated with BlackRock Australia and do not approve, endorse, review, or recommend iShares Composite Bond ETF, iShares Government Inflation ETF or iShares Treasury ETF. BLOOMBERG and the Bloomberg AusBond Composite Index℠, Bloomberg AusBond Inflation Government Index℠ and Bloomberg AusBond Treasury Index℠ are trademarks or servicemarks of Bloomberg and have been licensed to BlackRock Australia. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to the Bloomberg AusBond Composite Index℠, Bloomberg AusBond Inflation Government Index℠ and Bloomberg AusBond Treasury Index℠.
The relevant product disclosure document or prospectus contains a more detailed description of the limited relationship the companies mentioned above have with BlackRock group of companies and any related funds.
Distribution Summary and Fund Payment Information
BlackRock Australia is required to disclose certain information to comply with the new withholding tax rules in relation to non-residents. Please consult your tax advisor to understand if and how the new disclosures may apply to you. The distribution details contained in these documents are estimates only.
Actual distribution information will be forwarded shortly after 30 June each year. The estimates are provided to you in good faith and have been derived from sources, materials and systems believed to be accurate and the best available at the time of the distribution. BlackRock Australia makes no representations and disclaims all express, implied and statutory warranties of any kind to you or any third party, including but not limited to, representations, and warranties regarding accuracy, timeliness or completeness of the estimate. In no event shall BlackRock Australia or any member of the BlackRock group of companies be liable for any damages, losses or expenses arising in connection with the use of, or reliance upon, the estimate by the recipient. A recipient must not provide distribution estimates to any third party unless consent is obtained from BlackRock Australia and they are accompanied by this disclaimer.
This information does not constitute general or personal financial product advice, nor does it constitute taxation advice. Investors should seek professional financial and taxation advice before making any investment decision. Please note that past distributions are not indicative of future distributions.
Indemnity
Where a claim is brought against BlackRock Australia or its related body corporate by a third party in relation to your use of the Website, you hereby agree to fully reimburse BlackRock Australia or its related body corporate for all losses, costs, actions, proceedings, claims, damages, expenses (including reasonable legal costs and expenses), or liabilities, whatsoever suffered or incurred directly by BlackRock Australia or its related body corporate as a consequence of improper use of the Website. Neither party should be liable to the other for any loss or damage which may be suffered by the other party due to any cause beyond the first party's reasonable control including without limitation any power failure.
You acknowledge and agree that it is your responsibility to keep secure and confidential any passwords that we issue to you and your authorised employees and not to let such password(s) become public knowledge. If any password(s) become known by someone other than you and your authorised employees, you must change those particular password(s) immediately using the function available for this purpose on the Website.
Copyright and Trademarks
Copyright in all the material, works, software, design, text, graphics and code contained on or used to produce the Website and in the information and material and in its arrangement or layout, is owned or licensed by BlackRock Australia or its related body corporate or its associates unless otherwise indicated. Other than as permitted below, your use of anything in which BlackRock Australia or its related body corporate or its associates own copyright is governed by the copyright laws of Australia and its international treaties with other countries, as applicable.
You are permitted to save or print a copy of the Website solely for your own information, research or study, but only if you do not modify the copy and you include the copyright notice "© BlackRock Investment Management (Australia) Limited" on the copy. You may not copy, publish, distribute, create works from or commercially exploit the content of the Website for any other purpose.
iShares® and BlackRock® are registered trademarks of BlackRock, Inc., or its subsidiaries. All other trademarks, servicemarks, or registered trademarks are the property of their respective owners. Nothing contained on the Website should be construed as granting, by implication, estoppel, or otherwise, any license or right to use any trademark displayed on the Website without the written permission of BlackRock Australia or such other third party that may own the trademark displayed on this website. Your use of the trademarks displayed on the Website, except as provided herein, is strictly prohibited.
Interactive Data Real Time Services
Certain information relating to iShares ETFs provided by Interactive Data Real Time Services ("Interactive Data") and its affiliates (the "Interactive Data Information") is owned by or licensed to Interactive Data and its affiliates. You are only permitted to use such Interactive Data Information for your own personal use. In no event shall you publish, retransmit, redistribute or otherwise reproduce any Interactive Data Information in any format to anyone, and you shall not use any Interactive Data Information in or in connection with any business or commercial enterprise, including, without limitation, any securities, investment, accounting, banking, legal or media business or enterprise.
Prior to the execution of an iShares ETF security trade based upon the Interactive Data Information, you are advised to consult with your broker or other financial representative to verify pricing information.
THE INTERACTIVE DATA INFORMATION IS PROVIDED TO THE USERS "AS IS." NEITHER INTERACTIVE DATA NOR ITS AFFILIATES MAKE ANY EXPRESS OR IMPLIED WARRANTIES OF ANY KIND REGARDING THE INTERACTIVE DATA INFORMATION, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. NEITHER INTERACTIVE DATA NOR ITS AFFILIATES GUARANTEE THE ADEQUACY, ACCURACY, TIMELINESS OR COMPLETENESS OF THE INTERACTIVE DATA INFORMATION NOR WILL THEY BE LIABLE TO ANY USER OR ANYONE ELSE FOR ANY INTERRUPTION, INACCURACY, ERROR OR OMISSION, REGARDLESS OF CAUSE, IN THE INTERACTIVE DATA INFORMATION OR FOR ANY DAMAGES (WHETHER DIRECT OR INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY) RESULTING THEREFROM.
The estimated NAV is indicative only, and the iShares ETFs are not open for transactions based on this price estimate. BlackRock Australia, its officers, employees and agents believe that the estimated NAV is correct as at its date of publication. While every care has been taken in the provision of the estimated NAV, BlackRock Australia makes no representations and disclaims all express, implied and statutory warranties of any kind to you or any third party, including but not limited to, representations, and warranties regarding accuracy, timeliness or completeness of the estimated NAV. Except where contrary to law, in no event shall BlackRock Australia or any member of the BlackRock group of companies be liable for any damages, losses or expenses arising in connection with the use of, or reliance upon, the estimated NAV.
Morningstar Web Tools
The Website includes certain web pages that provide access to information, data, analyses, reports, tools, and opinions (defined as “material”) that are provided by Morningstar Australasia Pty Limited ABN: 95 090 665 544, AFSL: 240892 and/or Morningstar Research Pty Ltd ABN 83 062 096 342, AFSL 243161 (both subsidiaries of Morningstar, Inc.). BlackRock Australia, its officers, employees and agents believe that the material is correct as at its date of publication. While every care has been taken in the provision of the material, BlackRock Australia makes no representations and disclaims all express, implied and statutory warranties of any kind to you or any third party, including but not limited to, representations, and warranties regarding accuracy, timeliness or completeness of the material. In no event shall BlackRock Australia or any member of the BlackRock group of companies be liable for any damages, losses or expenses arising in connection with your use of, or reliance upon, the material.
The material is only for use by financial adviser and institutional users. In accessing and using the material, you have registered and certified that you are an Australian Financial Services (AFS) Licensee or the representative of an AFS Licensee or a wholesale client within the meaning of the Corporations Act 2001. You assume full responsibility in determining the appropriateness of each fund, security, account or model chosen by you when using the material. The material is provided on an "as is" basis and for illustrative purposes only.
You cannot rely on the material as a guarantee against loss of capital nor as an assurance that an investment approach based on the material will be successful. BlackRock Australia does not provide financial advice.
This material is general in nature, and has been prepared without taking into account any individual’s objectives, financial situation, or needs. You should seek independent professional legal, financial, taxation, and/or other professional advice before making an investment decision. The material may include past performance. Past performance is not a reliable indicator of future performance.
Loss or Damage to your Systems
BlackRock Australia or its related body corporate will not be liable for any loss or damage from any cause to your system or website, or to people linking to this material from your website, caused by or in connection with the use or link to this material. Any such loss or damage will be your responsibility. BlackRock Australia advises you to take your own precautions in relation to protecting your system or website from malfunction or viruses.
Links to, and from, other Sites
When you use a link to go from the Website to another site, none of these links comprise or imply support, endorsement or recommendation of any other company, product or service by us. We do not control and are not responsible for the information on any other site found through the Website. Linking to and framing of the Website is not permitted without our express written consent.
Dear Clients,
Last year we wrote to you that BlackRock was making sustainability our new standard for investing. We outlined how we were making sustainability integral to the way we manage risk, generate alpha, build portfolios, and pursue investment stewardship, in order to help improve your investment outcomes. We made this commitment on the strength of a deeply-held investment conviction: that integrating sustainability can help investors build more resilient portfolios and achieve better long-term, risk-adjusted returns.
In 2020, we completed our goal of having 100% of our active and advisory portfolios ESG-integrated. We launched Aladdin Climate to set a new standard for climate data and analytics. We intensified our investment stewardship focus on sustainability. And we introduced nearly a hundred new sustainable funds, helping to increase access and provide investors with greater choice. You can read a summary of our 2020 actions here.
Not long after we wrote to you in January, COVID-19 hit the world, exacting a horrific human and economic toll that continues today. As markets tumbled, many observers suggested that the pandemic would slow global action on climate change. But just the opposite happened. As Larry wrote today in his annual letter to corporate CEOs, the pandemic has forced society as a whole to reckon more deeply with this existential threat.
2020 was a historic year of climate change commitments by corporations, governments, and investors alike. These commitments are centered on achieving “net zero” – that is, building an economy that emits no more carbon dioxide than it removes from the atmosphere by 2050, the scientifically-established threshold necessary to keep global warming well below 2ºC.
The past year saw major net zero commitments by China, the EU, Japan, and South Korea, and last week the U.S. rejoined the Paris Agreement. More and more financial regulators are making climate risk disclosure mandatory, central banks are stress testing for climate risk, and policymakers around the world are collaborating to achieve common climate goals. 127 governments – responsible for more than 60% of the world’s emissions – and over 1,100 companies are considering or already implementing net zero commitments.
These changes will have dramatic impacts for investors. Last year, we wrote that investors were increasingly recognizing that climate risk is investment risk, which would drive a significant reallocation of capital. We also believe that climate transition creates a historic investment opportunity. With the world moving to net zero, BlackRock can best serve our clients by helping them be at the forefront of that transition.
BlackRock is committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner. We are taking a number of steps to help investors prepare their portfolios for a net zero world, including capturing opportunities created by the net zero transition. Key actions for 2021 include:
The transition to net zero will fundamentally reshape the global economy. On this episode of BlackRock Bottom Line, Jessica Tan, Head of Corporate Strategy, discusses the meaning of this transition for investors, companies and society.
Last year, we outlined our conviction that the world was on the cusp of a tectonic shift – a fundamental reallocation of capital towards sustainable assets. In 2020, we began to see this shift take shape. From January to November 2020, investors in mutual funds and ETFs globally invested $288 billion in sustainable products, a 96% increase over the whole of 2019.1
This increasing shift towards sustainable assets has resulted from a range of factors –improved sustainability data, a widened array of sustainable investment options, and a growing consensus about sustainability as a persistent driver of returns. This is fueling a global reallocation of capital towards more sustainable companies that will continue over many years – and we believe that investors who move more quickly to take part in this reallocation will benefit.
During 2020, 81% of a globally-representative selection of sustainable indexes outperformed their parent benchmarks.2 This outperformance was even more pronounced during the first quarter downturn, another instance of sustainable funds’ resilience that we have seen in prior downturns.3 Investment returns can and will fluctuate over specific periods, but this evidence is helping to end the misconception that investing sustainably has to come at the cost of lower returns.
The new understanding of sustainable investing and the global momentum towards net zero means that there will be dramatic reshaping of the economy over the next few decades. This transformation has profound implications for you, our clients, and we are committed to being your partner of choice in providing the data, tools, strategies and insights to help you navigate the transition. This letter is focused on our climate-related initiatives, but we continue to deepen our capabilities across a full range of sustainability issues.
Because the global economy today is itself carbon intensive, the portfolios of most diversified investors – including the portfolios of BlackRock’s clients in aggregate – remain carbon intensive. That cannot and will not change overnight, and BlackRock’s aggregate portfolio will necessarily be subject to the investment decisions of our clients. Nonetheless, there is significant global momentum towards a net zero economy, and BlackRock believes that our clients are best served by being at the forefront of that transition. Our actions to help you achieve that objective fall into three broad categories: measurement and transparency, investment management, and investment stewardship.
We recently surveyed investors representing $25 trillion in assets under management, who overwhelmingly indicated their intention to increase their allocation to sustainable investments, but also expressed that a lack of quality data was the single biggest obstacle to doing so. Investors are asking for better data and measurement on how their portfolios are positioned for the energy transition.
Temperature Alignment and Net Zero Disclosure Goals
In order for investors to judge a portfolio’s preparedness for the energy transition, and to allocate in accordance with their own net zero ambitions, they need to understand the transition pathways of their portfolios.
Today, BlackRock publicly reports weighted-average carbon intensity, in line with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, for over $2 trillion in iShares ETFs and BlackRock mutual funds. However, we recognize that today’s carbon intensity metrics do not provide the whole picture as to how portfolios are positioned to adapt to the global transition towards net zero – for example, their “temperature alignment.”
Temperature alignment is a measurement of the global temperature change consistent with a portfolio’s holdings. Methodologies for measuring temperature alignment are constantly evolving, based on new research and data specific to particular sectors and regions. BlackRock has been deeply engaged in advancing this discussion alongside peers and partners such as the TCFD.
These disclosures – and how they help investors understand the decarbonization pathway of an investment – will play an increasingly consequential role in asset allocation decisions. In order to provide our clients with this essential information, as well as improve public availability of data on the world’s current climate trajectory, we commit to the following disclosures by year-end 2021 for any markets with sufficiently reliable data and noting that methodologies around net zero alignment continue to evolve:
Aladdin Climate
In order to more easily calculate and understand temperature alignment and climate risk, investors need better tools and technology. To address this, we are developing Aladdin Climate, which will add a wide range of climate data, risk measurement and implementation capabilities to Aladdin, the industry’s leading risk management technology. Through the development of Aladdin Climate, we will help more investors manage and meet their climate objectives by measuring the portfolio impacts of physical risks like extreme weather and transition risks like the impact of policy changes, technology and energy supply. Over time, this will allow investors to calculate security- and portfolio-level “climate-adjusted” values, track a portfolio’s trajectory towards net zero, and better identify climate risks and opportunities. Our aspiration is for Aladdin Climate to set the standard across data, climate risk models and processes that translate climate science into portfolio returns.
We are taking a number of actions to augment our investment platform and our risk management tools. Each step we take will be animated by rigorous research that seeks to identify the specific ways in which climate insights can help drive financial returns.
Integrating Climate Considerations into BlackRock’s Capital Market Assumptions
Today, few financial forecasters include the effects of climate change in their economic projections and return expectations. We believe this fails to capture an accurate picture of the future. This year, BlackRock is enhancing our capital market assumptions – long-run estimates of risk and return – to incorporate climate considerations. Underpinning our new CMAs – the cornerstones of the portfolios we build and implement on behalf of clients – is the belief that successfully avoiding climate change damages will help drive economic growth and offer investors better returns. By examining carbon emissions intensity and other measures in the new CMAs, we believe the transition will reward companies, sectors, and regions that adjust and penalize others, creating opportunities for investors. Sustainability issues are no longer something that can be addressed after strategic investment decisions have been made – rather, we believe they are indispensable to making investment decisions, which is why we are incorporating them into our portfolio design process.
Implementing a “Heightened Scrutiny Model” to Manage Exposures in Active Portfolios
We expect the issuers we invest in on our clients’ behalf to be adequately managing the global transition towards a net zero economy. While many companies are energetically preparing for this evolution, others that are not adequately prepared present a risk to our clients’ portfolios. As part of our heightened scrutiny framework for embedding sustainability risk into our active investment process, and using our full set of risk management tools, we will be establishing a “focus universe” of holdings that present a particularly significant climate-related risk, due to:
Where we do not see progress in this area, and in particular where we see a lack of alignment combined with a lack of engagement, we will not only use our vote against management for our index portfolio-held shares, we will also flag these holdings for potential exit in our discretionary active portfolios because we believe they would present a risk to our clients’ returns. Conversely, we believe companies that distinguish themselves in terms of their emissions trajectory, transition preparedness and governance will often represent an opportunity for our clients.
Offering Temperature-Aligned and Climate-Focused Products
We are committed to offering our clients a full set of climate-oriented investment options. In 2021, we will launch investment products with explicit temperature alignment goals, to allow clients to achieve their net zero objectives. We are eager to work with index providers, scenario modelers, and climate scientists to help advance the emerging net zero investment landscape.
In addition to temperature-aligned products, we will launch broad-market, low-carbon transition strategies that can be easily substituted for market cap weighted index exposures. We will also introduce an explicit “climate objective” for new sustainable funds; for example, carbon reduction targets or a tilt towards issuers better prepared for the energy transition.
Climate Innovation Opportunities
Today’s economy remains heavily reliant on fossil fuels; however, the transition to a net zero world is creating significant investment opportunities across a variety of sectors, including power, transportation, industry, building and agriculture. We are already one of the world’s largest investors in renewable energy, and we are continuously working to seek out new opportunities in climate innovation in both public and private markets. In addition, we plan to expand our renewable power capabilities in 2021 beyond wind and solar to climate infrastructure more broadly, accelerating the energy transition in emerging markets through our Climate Finance Partnership with the French and German governments and three leading U.S. impact charitable organizations.
Enabling Client Choice
A core principle of our approach to investment management is offering our clients choice. As investors increasingly seek to align their investments to net zero, the ability to build more customized portfolios will be a powerful tool in helping them achieve their goals. We have long been a leader in helping institutional clients build customized portfolios, and in November of 2020, we announced our entry into a definitive agreement to acquire Aperio, a U.S. investment manager. This acquisition will enable us to help investors access the customization that traditionally was only available to the largest institutional clients. Over time, it is our aspiration to bring this customization technology to even more investors.
In addition, customization allows investors to express their preferences not only around net zero, but also to embed values into their portfolios more deeply – social, religious, or otherwise. This capability builds on our existing suite of products that allows investors to express personal preferences or pursue positive sustainability goals, such as our screened ETFs or our Impact platform, which invests in businesses addressing social or environmental problems – for example, affordable housing or companies that are driving change in undercapitalized communities in the U.S.
Investment stewardship plays a key role in how we fulfill our fiduciary duty to our clients. We engage with companies regarding governance and sustainable business practices that we believe promote durable, long-term profitability. As the past year has only intensified our conviction that sustainability risk – and climate risk in particular – is investment risk, our stewardship team is continuing to increase its focus on how sustainability-related factors are impacting a company’s ability to generate shareholder returns.
We are explicitly asking that all companies disclose a business plan aligned with the goal of limiting global warming to well below 2ºC, consistent with achieving net zero global greenhouse gas emissions by 2050. These disclosures are essential to helping investors assess a company’s ability to transition its business to a low-carbon world and to capture value-creation opportunities created by the climate transition.
Strengthening Our Engagement on Climate Risk
Last year, our stewardship team focused on a universe of 440 carbon-intensive companies, representing approximately 60% of the global Scope 1 and 2 emissions of the companies in which our clients invest. Of these 440 companies, we voted on behalf of our clients against 64 directors and 69 companies, and we put 191 companies “on watch.” Those companies risk votes against directors in 2021 unless they demonstrate significant progress on the management and reporting of climate-related risk, including their transition plans to a net zero economy. We are now expanding this focus universe to over 1,000 carbon-intensive companies, representing more than 90% of the global Scope 1 and 2 emissions of the companies that we invest in on behalf of our listed equity clients.
Supporting Shareholder Proposals
We see voting on shareholder proposals playing an increasingly important role in our stewardship efforts around sustainability. Accordingly, where we agree with the intent of a shareholder proposal addressing a material business risk (such as climate-related risk) and if we determine that management could do better in managing and disclosing that risk, we will support the proposal. We may also support a proposal if management is on track, but we believe that voting in favor might accelerate their progress. As a long-term investor, BlackRock has historically engaged to explain our views on an issue and given management ample time to address it. However, given the need for urgent action on many business-relevant sustainability issues, we will be more likely to support a shareholder proposal without waiting.
Using our new approach to shareholder proposals, in the second half of 2020, we supported 54% of all environmental and social proposals, having assessed that they were aligned with long-term value.
Clear and Unified Standards
We believe that convergence of disclosure standards is essential to further adoption of net zero-aligned investing – to reduce the burden on companies and to promote informed investment decisions supported by clear and consistent data. For sustainability reporting, we support convergence under a single standard and have endorsed the approach put forward by the International Financial Reporting Standards Foundation. While the world moves towards a single standard, BlackRock continues to endorse TCFD- and SASB-aligned reporting.
BlackRock is also pursuing a number of efforts at the corporate level to support the transition to a net zero world.
In 2021, we intend to expand our Scope 3 reporting to include the aggregate emissions attributable to the investment portfolios we manage on our clients’ behalf, where data permits. While these emissions will continue to reflect the investment decisions of our clients and the progress of the global economy towards net zero, we believe that over time, the initiatives set forth in this letter will serve to reduce the carbon intensity of our assets under management and increase the percentage of assets that are aligned to net zero.
BlackRock is committed to the global goal of a just and fair transition to net zero. As the net zero transition reshapes the global economy, it will create a significant opportunity for investors. We are committed to providing you with the solutions, tools and the data to navigate this transition and to help you achieve the outcomes you seek. If you have questions about the steps we are taking, or if you would like to arrange a portfolio review to understand any potential implications for the assets we manage on your behalf, our relationship managers and product strategists are at your disposal. We are grateful for the trust you place in us.
Sincerely,
BlackRock’s Global Executive Committee