Sustainable investing

Sustainable investing

What is sustainable investing?

Sustainable investing is about investing in progress, and recognising that companies solving the world’s biggest challenges can be best positioned to grow. It is about pioneering better ways of doing business, and creating the momentum to encourage more and more people to opt in to the future we’re working to create.

Through the combination of traditional investment approaches with environmental, social and governance (ESG) insights, investors ranging from global institutions to individuals are taking a sustainable approach to pursuing their investment goals.

 


 

What’s next for sustainability in 2020?

Brian Deese, Global Head of Sustainable Investing, discusses the importance of considering sustainability risks in financial investments.

The growth of sustainable investing

Assets in dedicated sustainable investing strategies have grown at a rapid pace in recent years, and this trend is showing no signs of slowing.

Gathering momentum
Growth in ESG funds under management, 2010-2019

Growth in ESG funds under management, 2010-2019

Source: BlackRock Investment Institute, with data from IMF, June 2019. Notes: Data are based on IMF staff calculations using Bloomberg Finance data. Asset under management are in USD billions. The year-to-date (YTD) data are as of June 2019. The chart shows global ESG-mandated funds only.

What is driving the growth of sustainable investing?

The number and diversity of investors looking for sustainable opportunities are on the rise for several reasons:
Financial
Future financial decision-makers are asking more of companies and are seeking more sustainable investment solutions.
Choice
Regulators and governments are expanding their focus on incorporating sustainability into investment information and decision making.
Risk
There is growing recognition that ESG research and analysis can potentially identify investment risks and generate excess returns.

How to invest sustainably

We draw a clear distinction between dedicated sustainable investing products and the process of integrating sustainability-related data or insights into existing investment processes.

There is a wide range of products available to investors looking for dedicated sustainable investment solutions. At BlackRock, we distil client motivations into a spectrum from Avoid to Advance.

  • Avoid” strategies involve the elimination of certain companies or sectors that are associated with increased ESG risk or which violate the asset owner's values.
  • Advance” strategies focus increasing exposure to positive ESG characteristics to align capital with certain behaviours or target specific positive social or environmental outcomes.

Different sustainable investing styles

ESG integration is the practice of incorporating ESG information into investment decisions to help enhance risk-adjusted returns, regardless of whether or not a strategy has a sustainable mandate. There is no one-size-fits-all approach but at BlackRock we see it as being about making research, data and insights available to all of our portfolio managers, and working with them to identify potential process enhancements across all investment activities.

Learn more about ESG integration

Why BlackRock for sustainable investing?

At BlackRock, sustainable investing spans a range of strategies that combine traditional investment approaches with environmental, social and governance (ESG) insights to seek long-term risk-adjusted return.

We are passionate about providing clients a clear picture of how sustainability-related issues affect risk and long-term financial performance.

Insights
Insights
Developing the clearest possible picture of how ESG issues affect risk and long-term return
Integration
Integration
Integrating sustainability-related insights and data into BlackRock’s investment processes across asset classes and investment styles.
Solutions
Solutions
Seeking to deliver sustainable investment solutions that empower clients to achieve their financial objectives.

BlackRock’s approach to sustainability

BlackRock’s purpose is to help more and more people experience financial well-being.

As a large investor, we are able – and feel a responsibility – to monitor the companies in which we invest and to engage with them constructively and privately where we believe would help preserve clients’ interests. BlackRock’s Investment Stewardship efforts, including our direct engagement and voting activities, encourage companies to deliver long-term, sustainable growth and returns for our clients.

As a fiduciary to our clients, in order to deliver the best outcomes, we are also focused on the sustainability of BlackRock’s performance over the long-term. This requires taking into account environmental, social and governance issues that have real and quantifiable impacts over the long-term for our firm, our people, and the communities in which we and our clients live and work.

Explore more topics

ESG Integration


Sustainable investing: Active equities

Corporate Sustainability