We’re now looking at a situation where it is being called a $30 trillion industry, a $30 trillion industry that Blackrock were able to get ahead of, consequently being named “The New King of Wall Street”.
Investing in Uber was once considered a relatively obvious choice. However, when viewing the company from an ESG point of view, many are directing attention to how much gas they burn all while not turning a profit for 10 years.
Many are predicting a changing of the guard post-pandemic, where ESG companies and focused hedge funds become the new leaders. This has been backed by Q1 performances of ESG funds in 2020, as sustainable investments largely outperformed their counterparts.
In a new report named; Sustainable Investing: Resilience amid Uncertainty’ Blackrock looked into performance differences between ESG indices and their core, non-ESG versions. Additionally - how ESG-focused investment funds have performed against their peers.
“In the first quarter of 2020, we have observed better risk-adjusted performance across sustainable products globally, with 94 per cent of a globally-representative selection of widely-analysed sustainable indices outperforming their parent benchmarks,” BlackRock observed.
“Companies with strong profiles on material sustainability issues have potential to outperform those with poor profiles,” BlackRock said in the report. “In particular, we believe companies managed with a focus on sustainability should be better positioned versus their less sustainable peers to weather adverse conditions while still benefiting from positive market environments.”
“Overall, this period of market turbulence and economic uncertainty has further reinforced our conviction that ESG characteristics indicate resilience during market downturns,”
“In this volatile environment, investors have been seeking to understand what characteristics contributed to comparative resilience in portfolios and how to incorporate these characteristics in their own investments.”
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