BlackRock chairman and chief executive Larry Fink has predicted assets in ETFs which include environmental, social and governance (ESG) factors will hit more than $400bn in the next decade, as he says they will eventually be equivalent to core portfolios.
In an interview with the Financial Times, Fink said he wants BlackRock to become a global leader in sustainable investing, adding investors did not have to sacrifice returns when gaining exposure to ESG products.
ESG ETFs currently have $25bn in assets under management (AUM) globally with BlackRock's market share totalling $7bn.
"Sustainable investing will be a core component for how everyone invests in the future," Fink said. "We are only at the early stages."
His comments come after Investment Week revealed the firm was planning to launch a suite of six ESG-screened ETFs in Europe, which listed on the London Stock Exchange today.
The "core" ESG suite will offer investors access to six different MSCI indices: World, Japan, Emerging Markets, European Economic and Monetary Union (EMU), US and Europe.
"We are going to see evidence over the long term that sustainable investing is going to be at least equivalent to core investments," BlackRock's CEO continued. "I believe personally it will be higher.
"When I go to the Nordics, the Netherlands, and France, it is almost a requirement to look at all forms of investment with sustainability in mind," he added. "Demand is getting greater and greater."
"One day we'll drop ‘sustainable' because this line-up will just be the core of all great portfolios," he added.
However, on 26 September, an environmental campaign named BlackRock's Big Problem criticised the firm and took part in demonstrations in New York after labelling the company for allegedly being the "largest owner of fossil fuel companies and single largest contributor to climate destruction".
Campaigners took part in a demonstration in New York for Climate Week, where they gathered outside the Bloomberg Global Business Forum to argue the giant asset manager is one of the largest in oil and gas companies, the largest investor in new coal plant development worldwide, and the largest US investor in rainforest destruction.
In its campaign material, it said that although Fink "wants to be a model corporate citizen", citing his philanthropy and involvement in a conservation organisation, BlackRock is failing to "walk its talk".
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