October 23, 2018 / News

BlackRock predicts ESG ETF growth to $400bn

By Joe McGrath, ESG Clarity

Sustainable investments in exchange traded funds will rise from the current level of $25 billion to $400 billion by 2028, the fund manager predicts

BlackRock predicts ESG ETF growth to $400bn

Assets invested in sustainably invested exchange traded funds will rise from the current $25 billion to $400 billion by 2028, according to an analysis of market trends by BlackRock

According to a report from the world’s largest fund manager, growth in ESG ETFs will mean that the total share of sustainable investments in ETFs will increase from today’s 3% of total assets, to 21% of all assets by 2028.

The company published the projection on the same day as chief executive Larry Fink said that sustainable investing would become a core component for how the world invests in the future, in an interview with the Financial Times. He added that this trend was in the “early stages”.

In a statement accompanying BlackRock’s growth projections, Baer Pettit, president at MSCI, said the index provider had noticed “a growing demand amongst asset owners and wealth managers for exclusions based on environmental, social and governance criteria.”

Philipp Hildebrand, vice chairman of BlackRock, added: “It is clear that there is a growing movement of investors who want to align their investment decisions with their values and beliefs.

“Increased transparency on the sustainability profile of their investment portfolios will enable investors to understand the potential ESG-related risks and opportunities they are exposed to.

“Strong ESG performers are more resilient and this has led to an irreversible move from an era of asking ‘why?’ to ‘why not?’ in sustainable investing.”

BlackRock accompanied its latest projections with the launch of a new set of exchange traded funds branded the iShares Sustainable Core ETF suite.

The six new Sustainable Core ETFs are:
– iShares MSCI World ESG Screened UCITS ETF
– iShares MSCI Japan ESG Screened UCITS ETF
– iShares MSCI Emerging Markets IMI ESG Screened UCITS ETF
– iShares MSCI Europe ESG Screened UCITS ETF
– iShares MSCI EMU ESG Screened UCITS ETF
– iShares MSCI USA ESG Screened UCITS ETF