sustainable investing

Sustainable Investing

We believe sustainability-related issues – ranging from board composition to human-capital management to climate change – have real impact.
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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 to deliver both financial and purpose-driven outcomes.

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

What’s next for sustainability in 2020?

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

Learn more about sustainable investing at BlackRock

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Growth of sustainable investing

Sustainable investing strategies have grown rapidly in recent years, and this trend shows no signs of slowing.

This graph depicts the actual and estimated growth of sustainable assets.

 

There’s no guarantee that forward-looking estimates will come to pass.

Sources: BlackRock, with data from Broadridge/Simfund, June 2018. Notes: The chart shows the total assets under management in ESG mutual funds (MFs) and ETFs globally. The 2019 to 2028 figures are based on BlackRock estimates, assuming a 5% annual growth rate in the underlying markets. Other assumptions: MF asset growth starts at 5% in 2019 and declines by 0.5% annually through 2022, then at a zeroto-0.5% rate annually thereafter. ETF asset growth starts at 45% and decreases by 5% annually through 2022, with a zero-to-3% pace thereafter.

What is driving the growth of sustainable investing?

The number of investors looking for sustainable opportunities is on the rise for several reasons:

Shifting client requirements
Future financial decision-makers are asking more of companies and are seeking more sustainable investment solutions.
Government influence
Regulators and governments are expanding their focus on incorporating sustainability into investment information and decision making.
Portfolio implications
There is growing recognition that ESG research and analysis can potentially identify investment risks and help generate excess returns.

Looking after our clients' assets for the long term

As a fiduciary investor, we work on behalf of our clients, the asset owners.

Engaging with companies
We take an engagement-first approach, emphasizing direct dialogue with companies on governance issues that have a material impact on long-term financial performance.
Using our vote
We perform research and analysis, carefully arriving at proxy vote decisions that we believe are in the best long-term economic interest of our clients.
Promoting thought leadership
We contribute to the development of policies and practices that support stewardship, long-term investing and value creation.

Engagement priorities

Our engagement priorities promote sound corporate governance and business practices that are consistent with sustainable long-term financial returns. We determine our engagement priorities based on our observation of market developments and emerging governance practices and evolve them year over year as necessary.

  • We focus on board composition, effectiveness and accountability as a top priority. In our experience, most governance issues require board leadership and oversight. We engage to better understand how boards assess their effectiveness and performance, as well as their position on director responsibilities and commitments, turnover and succession planning, crisis management, and diversity.

  • We expect boards to be fully engaged with management on the development and implementation of the company’s strategy. Companies should succinctly explain their long-term strategic goals, the milestones that demonstrate progress, and any obstacles anticipated or incurred.

  • We expect executive-pay policies to use performance measures that are closely linked to the company’s long-term strategy and goals to ensure executives are rewarded for delivering strong and sustainable returns over the long-term, as opposed to short-term hikes in share prices.

  • Sound practices in relation to the material environmental factors inherent to a company’s business model can be a signal of operational excellence and management quality. Environmental factors relevant to the long-term economic performance of companies are typically industry-specific, although in today’s dynamic business environment, some, such as regulation and technological change, can have a broader impact. Corporate reporting should help investors and others understand the company’s approach to these factors and how risks are integrated, and opportunities realized.

  • In a talent-constrained environment, we view a company’s approach to human capital management as a potential competitive advantage. We expect disclosure around a company’s approach to ensuring the adoption of the sound business practices likely to create an engaged and stable workforce.

ESG integration

There is increasing awareness that material environmental, social and governance (ESG) factors can be tied to a company’s long-term performance. As such, more and more investors are looking to integrate sustainability insights and data into their traditional investment processes.  By expanding access to data and insights on material ESG risks and opportunities we can become better overall investors.

Learn more about ESG integration

 

Different sustainable investing styles

There is a wide range of strategies 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 that violate the asset owner's values.
  • Advance” strategies focus on increasing exposure to positive ESG characteristics to align capital with certain behaviors or to target specific positive social or environmental outcomes.
This table further explains avoid and advance styles of sustainable investing.

 

Sources: BlackRock Sustainable Investing, December 2019.

Sustainable, or ESG-focused, strategies carry risks like any other investments, yet we see encouraging evidence that investors can potentially make their portfolios more sustainable without compromising on traditional financial goals.

BlackRock’s latest sustainable investing insights

  • ESG moves centre stage in private debt

    Dec 21, 2020 | By BlackRock
    Private debt strategies can work with borrowers on ESG issues. Sonia Richer, Head of Research for European Middle Market Private Debt, explains how.
    Read more Read more
  • Addressing investment stewardship and the ‘G’ in ESG

    Dec 9, 2020
    We share perspectives on Investment Stewardship, the G in ESG, and how they can help drive long-term sustainable value for investors.
    Watch on-demand Watch on-demand
  • Sustainability goes mainstream

    Dec 3, 2020 | By BlackRock
    BlackRock recently surveyed clients around the world to understand the shift towards sustainable assets and how the pandemic may affect it. Our findings were clear: The tectonic shift towards sustainable investing is accelerating.
    Explore survey results Explore survey results
  • Helping our clients invest sustainably

    Dec 3, 2020 | By BlackRock
    Our survey revealed that sustainability considerations are increasingly becoming a central aspect of our clients’ investment approaches. Read our update on our 2020 sustainability progress.
    Read our 2020 actions Read our 2020 actions
  • Physical Effects & Economic Risks of Climate Change

    Oct 28, 2020
    We discuss the increasing importance of the environmental component of ESG in the era of climate change.
    Watch on-demand Watch on-demand
  • Rethinking the ‘S’ in ESG

    Sep 29, 2020 | By BlackRock
    BlackRock and CalPERS discuss the increasing importance of ESG and sustainability more broadly, in this time of upheaval.
    Watch on-demand Watch on-demand
  • New perspectives on macro investing

    Sep 11, 2020
    In today’s fast-changing market, a proper understanding of the macroeconomic environment is essential to investing.
    Read full article Read full article
  • Sustainable investing: active equities

    Jul 30, 2020
    Sustainable investing is going mainstream. The Systematic Active Equity team discusses the need to dig beyond headline numbers.
    Read article Read article
  • Troubled waters

    Jul 21, 2020 | By BlackRock
    What would the world look like with less water? We explore the often overlooked risk of water stress and its financial implications on portfolios.
    Read more Read more
  • Helping our clients invest sustainably

    May 18, 2020 | By BlackRock
    We assess our progress against the commitment we made to help our clients achieve their sustainable investing goals.
    Read update Read update
  • Resilience amid uncertainty

    May 18, 2020 | By BlackRock
    Amid historic volatility, investors turned to sustainable strategies, and the strategies demonstrated their resilience.
    Read report Read report
  • A pivotal moment for sustainable investing

    May 15, 2020 | By BlackRock
    How ESG strategies have performed during the pandemic and why they will become increasingly important in the future.
    Read blog Read blog
  • Accelerating sustainability

    May 13, 2020
    Join our experts for a discussion of why ESG is likely to matter more than ever as the COVID crisis eases
    Listen on-demand Listen on-demand
  • Why sustainability matters now more than ever

    May 7, 2020
    We examine the investment opportunities that ESG is creating and take a look at the latest trends in impact investing.
    Listen on-demand Listen on-demand
  • Renewables are proving resilient

    May 6, 2020 | By BlackRock
    How well-structured deals and the ongoing global energy transition can benefit wind and solar investments in the current downturn.
    Read Q&A Read Q&A
  • How a global pandemic could accelerate ESG investing

    Apr 13, 2020 | By Tony DeSpirito
    Tony DeSpirito discusses its potential impact on ESG investing and how it may hasten an important trend for active investors.
    Read more Read more
  • Sustainability: The tectonic shift transforming investing

    Feb 27, 2020 | By BlackRock
    We believe a return sacrifice is not needed when adopting sustainable investing.
    Read more Read more
  • A climate scenario analysis of US insurers’ portfolios

    Dec 2, 2019 | By BlackRock
    How investors can better understand climate risks and adapt investment strategies to manage them.
    Read more Read more
  • Sustainability: The bond that endures

    Nov 20, 2019 | By BlackRock
    Evidence is building that a focus on sustainability can help investors build more resilient portfolios.
    Read more Read more
  • Portfolio resilience through sustainability

    Sep 23, 2019 | By Meaghan Muldoon
    We explore how insurers can enhance their resilience to climate change from both a physical and transition-risk perspective
    Read more Read more
  • Integrating sustainability

    May 31, 2019 | By BlackRock
    As sustainable investing picks up, we see a push for the integration of ESG considerations for investors.
    Read more Read more
  • Real assets sustainable investing report

    May 23, 2019 | By BlackRock
    The long-term and physical nature of real asset investments make ESG considerations especially important.
    Explore report Explore report
  • Is the sun setting for fossil fuels?

    May 14, 2019
    As we focus more on society’s impact on the environment and our climate, renewable energy is becoming harder to ignore.
    Listen on Apple Podcasts Listen on Apple Podcasts
  • Creating a sustainable core: Balancing ESG and risk in index portfolio...

    May 10, 2019 | By BlackRock
    With sustainability increasingly becoming the future of investing, investors are looking to express their environmental, social and governance views.
    Read more Read more
  • Webcast: Mapping climate risk in portfolios

    Apr 22, 2019 | By BlackRock
    Join BlackRock’s sustainability thought leaders as they discuss their groundbreaking research on the topic and what it means for investors.
    Watch on-demand Watch on-demand
  • Getting physical: assessing climate risks

    A series of recent extreme weather events has a put a spotlight on climate risks.
    Read more Read more
  • Sustainability: The future of investing

    Jan 25, 2019 | By BlackRock Investment Institute
    We discuss key themes driving transformation in sustainable investing and explain why the future of investing is sustainable. Explore the themes now.
    Read more Read more

Meet our team

BlackRock’s sustainable investing team is focused on identifying drivers of long-term return associated with environmental, social, and governance (ESG) issues; integrating them throughout BlackRock's investment process; and creating solutions for our clients to help achieve sustainable investment returns.

Leadership
Brian Deese
Global Head of Sustainable Investing
Read biography
Meaghan Muldoon
EMEA Head of Sustainable Investing
Read biography
Andre Bertolotti
Head of Global Sustainable Research and Data
Read biography
Corporate 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 where we believe that would help preserve clients’ interests.
Learn more Learn more
Corporate sustainability

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