BlackRock Research Highlights Potential Outperformance Opportunities Driven by Sustainability Data

Research Points to Innovation, Business Catalysts and Asset Flows as Factors that Can Lead to Outperforming the Broader Market

BlackRock Expands Active Equity and Fixed Income Line-Up with Sustainable Infrastructure, Climate and Broad ESG Funds

New research from BlackRock highlights how sustainability-oriented business catalysts and data help active investment managers identify companies better positioned to outperform traditional benchmarks as the world transitions to a net zero economy.

An estimated $50 to $100 trillion in capital investment is required to successfully transition to a net-zero global economy.¹ BlackRock research shows that as more companies participate in the journey to net zero during this period of monumental economic change, active investors can increasingly find opportunities to outperform the traditional equities market in three ways: by incorporating sustainable insights into their investment strategies, identifying climate-related financial catalysts and incorporating them into the investment process, and seeking out investment opportunities in emerging technologies.

“We’ve been clear about our conviction that sustainability criteria have material impacts on investment returns, and our latest research builds on our thesis,” said Rich Kushel, Senior Managing Director and Head of the Portfolio Management Group at BlackRock. “The key to active management is our ability to consistently identify companies and data points that can help us generate investment alpha. The incorporation of sustainability analytics is an increasingly important component to assessing the potential of companies and technologies as sources of return.”

Providing More Active Sustainable Options

To provide clients with its active insights and more access to sustainable strategies, BlackRock is launching nine new funds and repurposing seven equity and fixed income funds with clearly articulated environmental, social and governance (ESG) criteria embedded in their investment mandates and objectives.

Across the new funds, investors will have access to a flagship suite of broad ESG offerings across fixed income including total return, high yield, emerging markets, and low-duration bond strategies, as well as equities, including US growth and value as well as large cap and international strategies. In addition to this suite, climate and sustainable infrastructure equity strategies complement the new broad ESG offerings.

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^[1] Intergovernmental Panel on Climate Change (IPCC), “Mitigation Pathways Compatible with 1.5°C in the Context of Sustainable Development,” in An IPCC Special Report on the impacts of global warming, 2018.

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