SUSTAINABLE INVESTING

ESG Integration

Integrating sustainability insights into our investment processes

We define ESG integration as the practice of explicitly incorporating environmental, social, and governance information into investment decisions to help enhance risk-adjusted returns. BlackRock has launched a firm-wide effort in an effort to enhance the integration of sustainability-related insights and data into investment processes globally.

Investors consider ESG
Our Sustainable Investing team provides data and insights to keep our investment teams well informed of sustainability considerati...
BlackRock leadership provides consistency
Our Global Head and CIO oversee the firm-wide effort to incorporate ESG into investment processes.
ESG research embedded in Aladdin
Issuer-level ESG data is integrated into our internal risk management system, Aladdin.

Our approach

Our activities to integrate sustainability considerations into the investment process mirror the diversity of clients we serve, as well as the range of investment strategies and asset classes we offer. Across BlackRock, we provide all of our investment teams with data and insights to keep them well informed of sustainability considerations.

Armed with the necessary data and tools, our portfolio managers are able to bring useful ESG information into their investment processes, discounting or emphasizing this information as they would any other financial input. Our framework to incorporate sustainability-related information within BlackRock’s strategies does not rely on active security-selection, however, as our index portfolio managers do not have the discretion to add or remove a company’s securities to their portfolio as long as that company remains in the relevant index. Therefore, in the context of our traditional index-investment mandates, our direct engagement with companies, including proxy voting, is the mechanism we use to integrate and advance material sustainability-related insights that we believe will help enhance long term risk adjusted return.

Our investment stewardship efforts benefit from firm-wide data and insights on sustainability-related issues, and our investment teams benefit from the sustainability insights derived from our stewardship activities – a powerful, positive feedback loop.

Leadership
Tariq Fancy
Managing Director, BlackRock Sustainable Investing Research