Barron’s, By Carleton English,
We are just beginning to realize the opportunities in sustainable investing, according to BlackRock Chief Executive Larry Fink.
Speaking at the firm’s annual investor day Thursday, Fink said he is hearing from investors all over the world who are interested in investing in a more sustainable way. The U.S. is catching up with Europe on that front, but Fink also noted he has also witnessed growing demand for sustainable investing from Asia—representing a “tectonic shift” in how people are thinking about building their portfolios. While the primary focus has long been to boost financial returns, investors globally are starting to consider a wider set of stakeholders when making their investment decisions.
While that may be good news for the planet, there is one problem so far: There are not enough opportunities for the amount of investment dollars flooding the sustainable investing universe.
“Our key is identifying new opportunities,” Fink said, adding that the firm stands at the “nexus” between investors and the companies they invest in. “The key that links all this together is the role we play in delivering data and analytics to quantify these investment strategies but also ensure that these investment strategies are maximizing return for our clients worldwide. “
And Fink, who co-founded the firm 33 years ago, plans to stick around longer to see more of the BlackRock’s success.
“I have no higher priority than ensuring we are developing the next generation of leaders for this company,” Fink said. “I am not planning to leave any time soon, but I have always said that my goal is when the other co-founders and I have moved on, the better firm is in better hands than it is today and I am more confident than ever that we will achieve that goal.”
BlackRock currently has more than $9 trillion in assets under management, with $353 billion in the firm’s sustainable investing products. During Thursday’s presentation, the firm noted that revenue for the segment grew 132% compared with last year and that 21% of its 2020 net new base fees came from sustainable strategies—up from 10% in 2019.
BlackRock shares were up 0.2% in midday trading, lagging behind the S&P 500, which was up 0.6%.