BlackRock has announced that it will accelerate removing companies that violate environmental, social and governance (ESG) standards from its iShares exchange-traded funds (ETFs) that track MSCI indexes. The company said it will now eject ESG laggards from its actively managed funds, index funds and ETFs. In addition, BlackRock plans to double the number of ETFs focusing on companies with high ESG scores and offering ESG-focused ETFs in more markets. The move by BlackRock reflects the growing importance of ESG factors to investors and underscores the asset manager’s efforts to meet the demand for sustainable investing options.
BlackRock’s decision responds to growing demand from investors for more significant ESG considerations. Investors are increasingly seeking to align their portfolios with ESG goals and values as they become more aware of the impact of their investments on society and the environment. Furthermore, ESG investing has been shown to produce competitive returns and lower risks in the long run, making it an attractive option for investors.
The move by BlackRock is expected to impact companies that fail to meet ESG standards significantly. It will incentivize companies to improve their ESG performance and provide investors with greater confidence in the sustainability of their investments.