Our 2021 sustainability update

As the global transition to net zero unfolds, BlackRock is helping our clients achieve their long-term goals and aspirations. Below are some of the ways we worked with clients this past year to prepare their portfolios for a net zero world.

Below is a list of 2021 sustainability updates we have made for clients across three key categories.

Strengthening sustainability data and analytics capabilities of Aladdin™ and eFront™

1. We’ve expanded access to sustainability-related metrics in core Aladdin tools from ~1,200 in 2020 to more than 8,000 in 2021².

2. We enhanced forward-looking sustainability analytics and reporting capabilities through a strategic partnership with Clarity AI. And we are strengthening our Aladdin Climate offering through the acquisition of Baringa’s Climate Change Scenario Model and Rhodium Climate Risk Models.

3. We added ESG risk data on thousands of private companies to eFront by partnering with RepRisk.

4. We launched eFront Insight ESG Outreach to provide a unified set of ESG metrics across private markets to help fund managers gather and analyze ESG data from portfolio companies and help investors to better understand and manage the sustainability of their private markets portfolios.

Disclosing Implied Temperature Rise, Climate Related Risks and Opportunities, and Net Zero Portfolio Alignment Goals

5. In December, BlackRock published MSCI’s Implied Temperature Rise (ITR) metric³ for our ETFs and index mutual funds to give clients more transparency into their investments.

6. To demonstrate how we seek to manage climate-related risks and opportunities across our business, we published our second report aligned to the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). This report marks the first time BlackRock reported preliminary estimates reflecting greenhouse gas emissions associated with our assets under management.

7. BlackRock continued to provide transparency to clients by publishing our 2030 net zero statement.

Improving ESG data and measurement

8. In November 2021, we were pleased to support the formation of the International Sustainability Standards Board (ISSB) at COP26. We have long called for a single, globally consistent set of baseline sustainability reporting standards on which different jurisdictions can build. We believe this will help drive progress toward the convergence needed to improve the quality of information available to investors and other stakeholders, while reducing the reporting burden on companies.

Building Climate Aware Portfolios

9. We incorporated the impacts of climate change into our Capital Market Assumptions (CMAs), asset class insights to help clients account for the investment risks and opportunities from the energy transition to net zero. Our CMAs assume a successful transition to net zero and currently estimate a 25% cumulative gain in GDP by 2040 as compared to business as usual.

Driving Sustainability in Private Markets

10. Created Decarbonization Partners. BlackRock and Temasek are contributing a total of $600 million in capital to invest in multiple funds focused on a wide range of decarbonization tech companies.

11. The third vintage of BlackRock's Global Renewable Power fund series held its final close in April 2021. At a fund size of US4.8bn, this is the largest investment vehicle of its kind globally in renewable power infrastructure⁴. 

12. In November 2021, during COP26, we closed the Climate Finance Partnership, which is a flagship public-private finance vehicle focused on investing in climate infrastructure  across emerging markets in order to accelerate the global transition to a net zero economy.

Delivering on Sustainability in Europe

13. In March 2021, we welcomed the Sustainable Finance Disclosure Regulation (SFDR) in Europe as a catalyst for accelerating sustainable investing in Europe. For 2021, 72% of our fund launches and updates to existing funds in Europe were Article 8 or Article 9, ahead of our 70% target⁵.

Expanding our Sustainable Active Strategies

14. We took steps to help clients benefit from opportunities created by the energy transition, from investments in electric cars to clean energy to energy-efficient housing by expanding our offerings targeting the climate transition.

Increasing Client Choice

15. We now have more than 250 sustainable mutual funds and ETFs, up from fewer than 100 in 2019, including two transparent active carbon transition readiness ETFs in the U.S. with approximately $1.8 billion in record setting aggregate investments on launch day from leading pensions and insurance clients around the world.

16. We introduced investment strategies that aim to reduce their carbon emissions in line with the Paris Agreement. We also worked with some of our largest clients to provide strategies with lower carbon emissions as an outcome and some that are aligned to United Nations Sustainable Development Goals.

Expanding Proxy Voting Choice for our clients

17. We are pursuing an initiative to use technology to give more of our clients the option to have a say in how proxy votes are cast at companies their money is invested in. We now offer this option to certain institutional clients, including pension funds that support 60 million people. We are working to expand that universe.

Setting priorities on Governance and Sustainability

18. Each year, BIS⁶ sets engagement priorities to calibrate our work around the governance and sustainability issues we consider material to the long-term value proposition of companies and the economic interests of BlackRock’s clients as shareholders. Our engagement priorities are mapped to specific United Nations Sustainable Development Goals (UN SDGs) and include high-level, globally relevant Key Performance Indicators (KPIs) to support the articulation of our perspectives and identification of progress on these issues.

19. We outlined our perspective on companies’ impacts on natural capital and human rights, and published seven thematic commentaries that describe our approach to engagement across these and other ESG themes.

Pursuing long-term value for our clients

20. We published a report ‘Pursuing long-term value for our clients’ to provide insight into our stewardship activities. The report was focused on BIS’ proxy voting on clients’ behalf at company shareholder meetings in the 12 months from July 1, 2020 through June 30, 2021 (the 2020-21 proxy year), and is part of our ongoing effort to increase transparency in stewardship.

21. Shareholder proposals represented less than 1% of the proposals we voted on in the 2020-2021 proxy year. We supported 47% of E & S shareholder proposals (81 out of 172) and 35% of ESG shareholder proposals overall (155 out of 889).

Active participation in private sector initiatives and the public policy debate

22. BlackRock is a member of The Net Zero Asset Managers initiative (NZAM), and through NZAM is a member of Glasgow Financial Alliance for Net Zero (GFANZ).

23. In September 2021, BlackRock became an approved signatory to the UK’s 2020 Stewardship Code on the basis of our 2020 Investment Stewardship Annual Report. The UK Stewardship Code is recognized globally as a best-practice benchmark in investment stewardship.

24. We became a member of the Task Force on Nature-related Financial Disclosures (TNFD), which aims to deliver a disclosure framework on evolving nature-related risks.