BlackRock is launching a liquid UCITS fund for investors that aims to invest in measurable social and environmental outcomes while generating competitive financial returns.
The asset manager says the BlackRock Strategic Funds (BSF) Impact World Equity fund is being launched at a time when sustainable and impact investing strategies are attracting a significant amount of interest as well as assets from investors.
According to the Global Sustainable Investment Association (GSIA), sustainable investment assets have expanded 61% between 2012 and 2014. GSIA defines impact investing as targeted investments aimed at solving social or environmental problems.
The fund aims to deliver a portfolio which gives exposure to companies with a positive measurable societal impact whilst considering returns and risk. It is run by BlackRock’s Scientific Active Equity which scores more than 8,000 companies daily across three societal impact outcome areas: health, the environment, and corporate citizenship. In addition, the fund screens out certain companies or industries, including alcohol, tobacco, and weapons manufacturers.
Research from GSIA highlights the significant role institutional investors play in the sustainable investment space, currently accounting for 86.9 per cent of global sustainable assets under management. However, increasingly women and millennial investors are placing greater emphasis on sustainability and social impact within their investment decision-making as they take control of greater assets. According to US Trust, 67 per cent of millennialsstate that their investment decisions express their social, political or environmental values. In addition, Morgan Stanley Institute for Sustainable Investing shows that76 per cent of female investorsbelieve environmental or social factors are important considerations in making investment decisions.
In February 2015, BlackRock appointed Deborah Winshel to help unify its approach to impact investing through the launch of BlackRock Impact, its global platform catering to investors with social or environmental objectives. BlackRock currently manages more than $200 billion of assets across environmental, social and governance (ESG) portfolios, and impact investments.
BlackRock managing director and global head of impact investing Deborah Winshel says: “Demographic shifts, stakeholder advocacy, and government regulation are combining to create unprecedented demand for sustainable and impact investment solutions.
“Impact investing enables investors to do more with their money than simply achieving a financial return. Through transparent measurement and outcome reporting, impact investing allows investors to better understand how their money is being put to work.”