How asset managing giant BlackRock leads ESG transformation

Investment management company BlackRock, Inc. is the world's largest asset manager with US$10 trillion under management and is the defining ESG leader

BlackRock, Inc. is a New York-based investment management company, founded in 1988 by Larry Fink, Robert S. Kapito, Susan Wagner, Barbara Novick, Ben Golub, Hugh Frater, Ralph Schlosstein, and Keith Anderson. It was originally established as a risk management and fixed income institutional asset management firm. 

The company is currently the world’s largest asset management company, recording  US$10 trillion in assets under management per January this year. The company now operates 70 offices in 30 countries with clients coming from 100 countries.

Its electronic system, Aladdin (Asset, Liability and Debt and Derivative Investment Network), had around US$11 trillion in assets, 7% of the world's financial assets, and 30,000 investment portfolios under management in 2013. The number jumped to US$21.6 trillion in assets in 2020.

On April 18, BlackRock director William E. Ford acquired 2,000 shares of the company’s stock for the average price of US$681.44 per share, with the transaction totalling US$1,362,880. The director now owns 14,915 shares of the company’s stock after the purchase, valued at US$10,163,677.

ESG investing with BlackRock

BlackRock claims that it focuses on sustainable investing to promote “better ways of doing business” and growth for “companies solving the world’s biggest challenges”. The company argues that investing in ESG is important as extreme changes to the climate are detrimental to all forms of investment, adding that it also helps investors to build “resilient portfolios” as well as “better long-term, risk-adjusted returns”. 

BlackRock's other goals include the advancement of financial well-being and investment access for the general public as well as the realisation of inclusive economies.

As people are becoming more and more aware of sustainability, BlackRock argues that companies, investors, and governments must also prepare to accommodate the changing society. BlackRock’s approach to sustainable investing combines traditional investment approaches with ESG to achieve “both financial and purpose-driven outcomes”.

To help companies achieve these outcomes, BlackRock has provided its sustainability strategy, which comprises two structural themes, namely climate transition and stakeholder capitalism. Through the first theme, BlackRock says they are “committed to supporting the goal of net-zero greenhouse gas emissions by 2050 or sooner.” 

Meanwhile, through the second theme, BlackRock aims to “help clients meet their social and financial objectives by linking sustainability with financial returns”.

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