Sustainable investing

Sustainable investing

Sustainable investing is about investing in progress, and recognizing 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.

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.

Sustainable Swell
Assets of sustainable mutual funds and ETFs, 2013-2028

Chart: Sustainable mutual funds and ETFs, 2013-2028

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 are the driving factors?

The number and diversity of investors looking for sustainable opportunities are on the rise for several reasons:
Decision makers

Future financial decision-makers are asking more of companies and are seeking more sustainable investment solutions.
Regulators and governments

Regulators and governments are expanding their focus on incorporating sustainability into investment information and decision making.
Growth recognition

There is growing recognition that ESG research and analysis can potentially identify investment risks and generate excess returns.

Dedicated and integrated sustainable investing

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

Sustainable solutions

There is a wide range of products available to investors looking for dedicated sustainable investment solutions. At BlackRock, we distill 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.

Sustainable investment solutions

ESG integration

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.

ESG integration

Impact Investing

Impact Funds intend to contribute to measurable positive environmental, social or United Nations Sustainable Development Goals (“SDGs”) outcomes, alongside financial returns.

The BlackRock Global Impact Fund, the BlackRock International Impact Fund and the BlackRock U.S. Impact Fund seek to maximize long-term total returns, seeking to outperform their benchmarks, through active investment into companies whose core business areas are helping to address the SDGs through their products and services.

Impact Investing