BlackRock Makes Big ESG Push on ETFs

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BlackRock ESG ETFs have emerged as a popular draw among institutional investors. This week, the alternative investment manager announced a $600 million investment from Finland’s largest pension insurance firm. Ilmarinen invested the capital in the iShares ESG MSCI EM Leaders ETF (NASDAQ: LDEM). This was the firms’ second investment in iShares ESG strategies.

In May 2019, the pension firm made an $850 million investment into the iShares ESG MSCI USA Leaders ETF (NASDAQ: SUSL).

BlackRock ESG ETFs

The company also announced plans this week to establish iShares fossil-fuel-screened ETFs under the firm’s advanced product line. The firm says the new ETFs filter out any ties to palm oil, for-profit prisons, and controversial weapons. These funds will center around U.S. companies, but they will also provide exposure to developed- and emerging-market companies.

The news comes a month after BlackRock made a big splash in the ESG market. CEO Larry Fink wrote a letter to clients explaining that the firm would center its focus on sustainability. He argued that this focus – alongside portfolios that address climate change – could offer better risk-adjusted returns. While Fink noted that it would likely take decades to shift the global economy away from fossil fuels, he said that increasing awareness and advocacy has forced firms to examine their impact on the world. He said that the global markets were “on the edge of a fundamental reshaping of finance.”

Related; ESG: ValueAct Salutes the BlackRock ESG ETFs “Climate Change of Heart”

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