Post by account_disabled on Mar 6, 2024 10:43:59 GMT
Investment fund activism In conjunction with Larry Fink's annual letter to investors , BlackRock's Executive Committee has published a letter to its clients, noting that sustainable development will be the guideline for the future of all investments. Here is the full transcript: Sustainability, BlackRock's new standard for investing Dear Customer, Since we founded BlackRock in 1988, we have worked to anticipate our clients' needs to help them manage risk and meet their investment goals. As those needs evolve, so does our strategy, but always grounded in our fiduciary commitment to you. In recent years, an increasing number of our clients have focused on the impact of sustainability on their investment portfolios. This shift has been driven by greater knowledge about how sustainability-related factors can affect economic growth, asset values, and financial markets in general. The most significant of these relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also in transition risk – primarily how the global transition to a low-carbon economy could affect the long-term profitability of a company.
As Larry Fink writes in his 2020 letter to CEOs , the investment risks generated by climate change result in a significant acceleration of capital reallocation, which in turn will have a profound impact on risk pricing and active around the world. As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios, including pursuing higher, more stable long-term returns. Because sustainable investment options have the Cell Phone Number List[/b potential to deliver better outcomes for clients, we are making sustainability an integral element of how BlackRock manages risk, builds portfolios, designs products and interacts with companies. We believe that sustainability should be the new investment standard. Over the past few years, we have deepened the integration of sustainability into BlackRock's technology, risk management, and product offerings. We are now accelerating those efforts in the following ways. Sustainable, resilient and transparent portfolios Resilient, well-constructed portfolios are essential to achieving long-term investment goals.
We are convinced that portfolios that integrate sustainability can achieve better risk-adjusted returns. And as the impact of sustainability on investment returns is increasing, we believe sustainable investments will be a fundamental foundation for clients' portfolios going forward. Sustainability, our standard in investment solutions – BlackRock manages a wide range of investment solutions that combine different vehicles to help investors achieve their investment objectives. Our intention is for sustainable funds to be the key pieces in these solutions to the extent possible, keeping them consistent with our clients' preferences and any applicable regulations, such as the Employee Retirement Income Security Act of 1974 . All aspects of this approach will be executed over time and in consultation with our clients. We are committed to offering these sustainable solutions with management fees comparable to traditional solutions. This year we will begin offering sustainable versions of our core model portfolios, including our range of Target Allocation models. These models will use index exposures optimized for environmental, social and governance (ESG) factors rather than capitalization-weighted index exposures.
As Larry Fink writes in his 2020 letter to CEOs , the investment risks generated by climate change result in a significant acceleration of capital reallocation, which in turn will have a profound impact on risk pricing and active around the world. As your fiduciary, BlackRock is committed to helping you navigate this transition and build more resilient portfolios, including pursuing higher, more stable long-term returns. Because sustainable investment options have the Cell Phone Number List[/b potential to deliver better outcomes for clients, we are making sustainability an integral element of how BlackRock manages risk, builds portfolios, designs products and interacts with companies. We believe that sustainability should be the new investment standard. Over the past few years, we have deepened the integration of sustainability into BlackRock's technology, risk management, and product offerings. We are now accelerating those efforts in the following ways. Sustainable, resilient and transparent portfolios Resilient, well-constructed portfolios are essential to achieving long-term investment goals.
We are convinced that portfolios that integrate sustainability can achieve better risk-adjusted returns. And as the impact of sustainability on investment returns is increasing, we believe sustainable investments will be a fundamental foundation for clients' portfolios going forward. Sustainability, our standard in investment solutions – BlackRock manages a wide range of investment solutions that combine different vehicles to help investors achieve their investment objectives. Our intention is for sustainable funds to be the key pieces in these solutions to the extent possible, keeping them consistent with our clients' preferences and any applicable regulations, such as the Employee Retirement Income Security Act of 1974 . All aspects of this approach will be executed over time and in consultation with our clients. We are committed to offering these sustainable solutions with management fees comparable to traditional solutions. This year we will begin offering sustainable versions of our core model portfolios, including our range of Target Allocation models. These models will use index exposures optimized for environmental, social and governance (ESG) factors rather than capitalization-weighted index exposures.