BlackRock manages over €332bn of SFDR-compliant assets
With the implementation on Wednesday 10 March of the sustainable finance disclosure regulation (SFDR) in the European Union, the US asset manager BlackRock said it currently manages more than €332bn of assets falling under articles 8 and 9 of SFDR.
“With SFDR, the European Union has put in place the first comprehensive, market-wide regulatory framework that more clearly defines the sustainable investment landscape and offers significant transparency to investors and other stakeholders. BlackRock welcomes this development as a real catalyst for promoting sustainable development in Europe,” wrote BlackRock's continental Europe co-heads, Christian Hyldahl and Stephane Lapiquonne, in a letter to investors.
The investment manager said 63% of its funds launched or repositioned in Europe in 2020 are compliant with either Article 8 or 9 of the new regulation. In addition, it underlined the flows observed in 2020 on funds falling under SFDR requirements (more than €69.5bn), i.e. 74% of active flows and 38% of index flows recorded in continental Europe. The firm forecasts that by 2021, 70% of its fund launches and repositionings in Europe will be compliant with Articles 8 or 9. “We expect this sustainable product development activity to continue to strengthen over time. We are also reviewing our European flagship ranges of Article 6 funds and believe that offering our clients Article 8 or 9 alternatives could provide a transition opportunity for more than 50% of these funds' current assets under management,” said BlackRock's continental European co-heads.
Lastly, Christian Hyldahl and Stephane Lapiquonne discussed the expansion of BlackRock's benchmark universe to include more than 1,000 carbon-intensive companies worldwide, responsible for more than 90% of the global Scope 1 and Scope 2 emissions of the companies held in the firm's equity portfolios. In 2020, out of a universe of 440 carbon-intensive companies, the manager voted “against 64 directors and 69 companies” for climate-related reasons and put 191 companies "on watch".”
These companies risk votes against directors in 2021, unless they demonstrate significant progress on the management and reporting of climate-related risk, including transition plans to a net zero economy, had warned BlackRock's CEO Larry Fink in its annual letter to investee companies.