Blackrock ESG Investing: A Guide to Responsible Investing

Blackrock ESG investing is a game-changer for responsible investing. Blackrock, the world's largest asset manager, has made a significant commitment to Environmental, Social, and Governance (ESG) investing.

Blackrock's ESG strategy focuses on long-term value creation, considering the potential risks and opportunities associated with ESG factors. This approach is designed to help investors achieve their financial goals while also promoting positive social and environmental outcomes.

By integrating ESG considerations into its investment decisions, Blackrock aims to reduce the risk of negative impacts on the environment, society, and the economy. This approach is in line with the growing demand for responsible investing.

Blackrock's ESG investment approach is based on a set of core principles, including the consideration of material ESG issues, engagement with companies to drive positive change, and the integration of ESG factors into investment research and decision-making.

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ESG investing is a way to consider environmental, social, and governance factors when making investment decisions. This approach is also known as sustainable investing.

ESG information can include a wide range of considerations, such as environmental impact, social responsibility, and governance practices.

Sustainable investing leverages ESG objectives, themes, and related considerations as a primary means for selecting investments.

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Sustainable investing is a strategy that leverages environmental, social, and/or governance (ESG) objectives as a primary means for selecting investments.

ESG stands for environmental, social, and governance, and refers to specific considerations that can be used as part of investment decision-making.

ESG information can include a wide range of factors, such as a company's environmental impact, its treatment of employees, and its governance structure.

Sustainable investing refers to strategies that prioritize these ESG considerations when making investment decisions.

Investors may use ESG information to inform their investment choices and align their portfolios with their values and goals.

Investing is a way to grow your wealth over time by putting your money into assets like stocks, bonds, or real estate. It's a common practice for individuals and organizations to invest their money to achieve their financial goals.

Not all investing strategies are the same, and one key distinction is between sustainable and transition investing. Transition investing is a specific type of sustainable investing that focuses on preparing for and contributing to the transition to a low-carbon economy.

BlackRock defines transition investing as investing with a focus on preparing for, being aligned to, benefitting from and/or contributing to the transition to a low-carbon economy.

BlackRock offers a wide range of sustainable investing products to help investors meet their goals.

The BlackRock sustainable investing platform has four categories: Screened, Uplift, Thematic, and Impact. These categories adopt different strategies to help investors meet their objectives.

Over 400 dedicated sustainable products and solutions are available across index and active platforms, with a combined USD$705B in sustainable assets under management.

Screened products constrain investments by avoiding issuers or business activities with certain environmental, social, and/or governance characteristics.

Uplift products commit to investments with improved environmental, social, and/or governance characteristics versus a stated universe or benchmark.

Thematic products target investments in issuers whose business models may benefit from or drive long-term sustainability outcomes.

Impact products commit to generating positive, measurable, and additional sustainability outcomes.

BlackRock also offers transition investing products, such as the BGF Brown to Green Materials Fund and the iShares MSCI India Climate Transition ETF.

Investors can also choose from a variety of thematic ETFs, such as the iShares Global Clean Energy ETF and the iShares MSCI Global Sustainable Development Goals ETF.

BlackRock's Model Portfolios, including the Target Allocation ESG ETF Model portfolio, provide a simple way for investors to get started with sustainable investing.

These products and solutions are designed to help investors reach their investment goals while also promoting sustainability and positive social impact.

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ESG stands for environmental, social, and governance and refers to specific considerations that can be used as part of investment decision-making.

Investing with ESG in mind can help you make more informed decisions and align your investments with your values. You can invest sustainably across your entire portfolio by using sustainable funds, such as BlackRock Model Portfolios.

BlackRock offers a range of sustainable funds, including the BlackRock Sustainable Advantage Large Cap Core Fund, which can provide broad market exposure while improving your portfolio's sustainability profile. The fund has a Morningstar Rating and a Net Asset Value of $72.72.

The transition to a low-carbon economy is creating significant investment opportunities, with an estimated average annual spend in the energy system through 2050 reaching US$4 trillion per year. This is up from US$2.2 trillion over the last decade, making it an exciting time for investors.

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The low-carbon transition is creating investment opportunities, with average annual spend in the energy system estimated to reach $4 trillion per year by 2050, up from $2.2 trillion over the last decade.

Three forces are driving this economic transformation: technological innovation, consumer and investor preferences for lower-carbon products, and shifts in government policies.

This is creating a huge market for companies that are developing innovative climate change solutions, such as clean energy.

BlackRock offers a range of sustainable funds that can help you invest in these opportunities, including the BlackRock Sustainable Advantage Large Cap Core Fund.

The iShares ESG Aware MSCI USA ETF and iShares ESG Aware MSCI EM ETF are also great options for investors who want to incorporate ESG principles into their portfolios.

By investing in sustainable funds, you can gain exposure to companies that are working towards a more sustainable future, while also potentially improving your portfolio's sustainability profile.

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Integration is key when it comes to investing with ESG in mind. ESG information is used as part of investment decision-making, specifically considering environmental, social, and governance factors.

Limiting other holdings to 30% can help achieve a balanced portfolio. This can include derivatives, cash and near cash instruments, shares or units of CIS, and fixed income transferable securities issued by governments and agencies worldwide.

Investing in ESG-integrated funds can provide a solid foundation for your portfolio. The iShares ESG Aware MSCI USA ETF, for example, offers a Morningstar Rating and a Net Asset Value of $33.90.

Core complements can be used to pursue high growth opportunities or invest in specific themes you care about. Thematic funds, such as those focused on clean energy, offer targeted exposure to themes like climate change solutions.

BlackRock's ESG Investing Platform offers a range of investment approaches that cater to different investor needs and goals.

The platform includes a Screened approach, which constrains investments by avoiding issuers or business activities with certain environmental, social, and governance characteristics.

For fixed income investors, BlackRock offers the iShares ESG Screened Global Bond Index Fund, which has a Net Asset Value of AUD0.87.

Uplift is another approach that focuses on investments with improved environmental, social, and governance characteristics versus a stated universe or benchmark.

The iShares Global Aggregate Bond ESG (AUD Hedged) ETF is a great example of an Uplift approach, with a Total Return of AUD96.50.

Thematic investing is also available, targeting investments in issuers whose business models may not only benefit from but also may drive long-term sustainability outcomes.

The iShares MSCI Global Sustainable Development Goals ETF is a Thematic investment option, with a price of $72.72.

Impact investing is another approach that commits to generating positive, measurable, and additional sustainability outcomes.

BlackRock's Diversified ESG Growth Fund is an example of an Impact investment approach, with a Morningstar Rating available for review.

Here's a breakdown of the different ESG investing approaches offered by BlackRock:

These approaches can be used across various asset classes, including fixed income, equity, and multi-asset portfolios.

ESG stands for environmental, social, and governance, and it's used as part of investment decision-making. ESG information can include considerations like environmental impact, social responsibility, and corporate governance.

BlackRock defines ESG integration as incorporating financially material ESG data or information into their firmwide processes to enhance risk-adjusted returns. This approach allows for a diversity of methods across different investment teams, strategies, and client mandates.

BlackRock has a framework for ESG integration that permits different approaches, and they engage with third-party index providers to design benchmark indexes that consider sustainability-related characteristics.

ESG stands for Environmental, Social, and Governance, which are the three main pillars of ESG investing.

BlackRock defines ESG integration as the practice of incorporating financially material ESG data or information into their firmwide processes.

This approach aims to enhance risk-adjusted returns of clients' portfolios, regardless of whether the fund or strategy has a sustainable or ESG-specific objective.

BlackRock has a framework for ESG integration that allows for diverse approaches across different investment teams, strategies, and client mandates.

Incorporating ESG data or information is not limited to sustainable or ESG-specific objectives, but is a practice used by BlackRock across their firmwide processes.

Financially material ESG data or information may help inform due diligence, portfolio or index construction, and/or monitoring processes of portfolios, as well as risk management.

BlackRock engages with third-party index providers to design benchmark indexes that take into account sustainability-related characteristics to meet client demands and regulatory requirements.

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Materials play a crucial role in the global emissions problem, but they're also a vital part of the solution.

A material revolution is underway in the energy landscape, with investors increasingly focusing on climate resilience as an investment theme.

Investors are paying more attention to climate resilience as an investment theme, which presents opportunities for sustainable investing.

There are five key approaches to investing with climate in mind, as outlined by Laura Segafredo, PhD, in her article "How to invest with climate in mind: Five approaches for your core portfolio".

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BlackRock's ESG investing approach has shown impressive results. According to BlackRock, their ESG funds outperformed their non-ESG funds in 75% of their asset classes over the past five years.

Studies have shown that ESG investing can lead to better long-term investment outcomes. BlackRock's research found that companies with high ESG ratings tend to have lower volatility and higher returns over the long-term.

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In the past five years, BlackRock's ESG funds have outperformed their non-ESG funds in 75% of their asset classes. This is a significant finding, as it suggests that ESG investing can be a viable and potentially profitable strategy.

BlackRock's commitment to ESG investing is evident in their $17 trillion asset base, which is now 50% invested in ESG-focused funds. This is a significant milestone, as it demonstrates the company's dedication to integrating ESG considerations into their investment decisions.

Research has shown that companies with strong ESG practices tend to have better financial performance. BlackRock's analysis found that companies with high ESG ratings tend to have higher profitability and lower debt levels.

Business and ESG metrics can help investors gain a more comprehensive view of specific activities in which a fund may be exposed through its investments.

Business Involvement metrics are calculated by BlackRock using data from MSCI ESG Research, which provides a profile of each company's specific business involvement.

This information is not indicative of a fund's investment objective, and doesn't change a fund's investment objective or constrain the fund's investable universe.

Business Involvement metrics are only displayed if at least 1% of the fund's gross weight includes securities covered by MSCI ESG Research.

The metrics are designed to identify companies where MSCI has conducted research and identified as having involvement in the covered activity, but may not be comprehensive due to lack of coverage by MSCI.

Business Involvement metrics can help investors gain a more comprehensive view of specific activities in which a fund may be exposed through its investments.

Business Involvement metrics are not indicative of a fund's investment objective, and they don't change a fund's investment objective or constrain its investable universe.

A fund's prospectus should be reviewed for more information regarding its investment strategy.

Business Involvement metrics are calculated by BlackRock using data from MSCI ESG Research, which provides a profile of each company's specific business involvement.

This data is then summed up across holdings and translated to a fund's market value exposure to listed Business Involvement areas.

Business Involvement metrics only identify companies where MSCI has conducted research and identified as having involvement in the covered activity.

There may be additional involvement in these covered activities where MSCI does not have coverage.

Business Involvement metrics are only displayed if at least 1% of the fund's gross weight includes securities covered by MSCI ESG Research.

Investing in corporate funds with an environmental, social, and governance (ESG) focus can be a double-edged sword. The funds' ESG investment strategies may limit the types and number of investment opportunities available, potentially leading to underperformance compared to other funds without an ESG focus.

This is because ESG funds often screen out certain industries or companies that don't meet their standards, reducing the pool of potential investments. As a result, ESG funds may end up investing in securities or industry sectors that underperform the market as a whole.

The Index Provider's ability to create a well-rounded index that addresses major social or environmental challenges can also be a challenge. If they're unsuccessful, the fund's performance may suffer.

ESG information is used as part of investment decision-making and considers environmental, social, and governance factors.

You can include ESG information in your portfolio by using equity funds like the iShares ESG Aware MSCI USA ETF.

The Morningstar Rating can help you evaluate the performance of ESG funds.

The Net Asset Value of the iShares ESG Aware MSCI EM ETF is $33.90.

Core complements can be used to pursue high growth opportunities or invest in specific themes you care about.

Thematic funds offer targeted exposure to themes such as clean energy, which can be a good option if you're interested in investing in innovative climate change solutions.

The BlackRock Sustainable Advantage Large Cap Core Fund is a core complement that can help you invest in a specific theme.

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BlackRock partners with companies that are developing innovative solutions to transform industries, such as Akaysha Energy, who are working to develop solutions to support existing energy systems.

The energy transition is a significant growth area, with renewable power seeing a decade of growth. Chow energy is a leader in commercial and industrial solar space in Thailand, offering customers the ability to reduce their carbon emissions and save on electricity bills with zero upfront investment.

BlackRock invests in companies that are driving the transition to provide access to renewable energy, such as CleanTech, which aims to improve the lives of its countrymen and communities. Empowering the future is their mission, and they aim to be able to improve the lives of their countrymen.

CleanTech has access to cost-effective capital through its partnership, which helps with the speed and scale of deploying renewables. This is a key factor in making renewable energy projects more attractive to investors.

Many countries have pledged net zero, and the question is how to get there. Regulatory support is lacking, but fostering public-private partnerships could help, leveraging expertise and capital from the private sector with policy objectives from the public sector.

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We're fortunate to have a talented team of experts who bring their passion and expertise to the world of ESG investing. BlackRock's Global Head of Sustainable Investment is Tanya Safadi, who leads the team's efforts to integrate ESG considerations into investment decisions.

Our team includes experts in various fields, such as environmental science and social impact assessment. They work closely with portfolio managers to identify opportunities for sustainable investing.

One of our team members, Tanya Safadi, has over 15 years of experience in sustainable investing and has been instrumental in shaping BlackRock's ESG strategy. Her expertise has been invaluable in helping us navigate the complexities of ESG investing.

We also have a dedicated team of analysts who research and assess the ESG performance of companies. They use a combination of data and research to identify companies that are leaders in ESG practices.

Our team is committed to transparency and accountability, which is reflected in our annual ESG reports. These reports provide detailed information on our ESG performance and progress towards our sustainability goals.

BlackRock's commitment to ESG investing is led by our CEO, Larry Fink, who has been a vocal advocate for sustainable investing. His leadership has helped to drive the adoption of ESG considerations in investment decisions.

We believe that our team's expertise and experience make us well-equipped to help investors navigate the complexities of ESG investing.

The U.S. Policy and ESG landscape is rapidly evolving, with significant implications for investors. The U.S. Inflation Reduction Act, passed in August 2022, contains measures to spur the transition to a low-carbon economy.

Trillions of dollars may be spent on modernizing infrastructure, much of which will go to environmental infrastructure solutions like energy efficiency. This could lead to a surge in demand for clean energy and related technologies.

Clean energy is coming of age as a core component of today's global power infrastructure, with greater potential growth ahead. Investing in clean energy ETFs could be a smart move for those looking to capitalize on this trend.

Next-generation environmental technologies may be increasingly important in our economy, with three key reasons driving this shift. These technologies have the potential to transform industries and create new opportunities for investors.

Millennial demand for sustainable investing is particularly strong, with 86% of surveyed millennial investors expressing an interest in sustainable investing. This is a significant market trend that investment professionals can't ignore.

As a record generational transfer of assets takes place, offering sustainability can help investment professionals capture the next generation of clients. This means that incorporating ESG considerations into investment strategies can be a key differentiator.

Millennials are particularly interested in sustainable investing because they care about the impact of their investments on the environment and society. They're not just looking for financial returns, but also a sense of purpose and responsibility.

By offering sustainable investing options, investment professionals can attract and retain millennial clients, which is essential for growing their practice. It's a way to express their clients' preferences in their portfolio and help them achieve their investment and sustainability objectives.

You can find a sustainable fund that aligns with your investment goals by selecting your primary goal and exploring the corresponding fund range. This will help you narrow down your options and make a more informed decision.

Filtering all sustainable funds using your own criteria is also a great way to find the right fit for your client's portfolio. This approach allows you to consider various factors and choose a fund that meets their specific needs.

Replacing core investments with sustainable funds may offer similar broad market exposure while improving the portfolio's sustainability profile. This can be a great way to get started with sustainable investing.

Consider using a four-step conversation guide to engage new and existing clients about their sustainable investing goals. This will help you understand their needs and provide them with the right resources to achieve their objectives.

Many clients are interested in investing sustainably, and as an advisor, you can leverage this trend to attract and retain clients. By incorporating sustainable investing strategies into their portfolios, you can potentially increase client satisfaction and loyalty.

You can find a range of sustainable building blocks to incorporate into your clients' portfolios, including "core" investments that provide a foundation for long-term holdings.

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