Investing sustainably for positive environmental change

Following the largest oil spill at the time in American history, the first Earth Day in April 1970 rallied 20 million Americans to raise awareness for environmental protection. The effort galvanized support for the creation of the Environmental Protection Agency (EPA) and landmark legislation to protect air, water and wildlife. By 1990, the grassroots event had transformed into a global movement, with more than 200 million participants representing 141 countries around the world.

The landscape of environmental protection initiatives has continued to evolve, now ranging from global policy and corporate campaigns to local recycling and energy efficiency programs. In addition, now more than ever, individuals and institutions are increasingly looking to utilize their investment capital as a catalystto advance positive environmental change. We refer to these as sustainable investing strategies.

Sustainable investing prevalence and demand

Once a niche market, sustainable investing is becoming mainstream, growing by more than 60 percent over the last few years. As I’ve previously written , global demand for sustainable strategies is driven both by individual and institutional investors seeking to incorporate environmental considerations into their portfolios. Carbon exposure in particular has become an issue of increasing focus among investors, particularly following the COP21 climate conference in Paris, where 188 countries committed to reducing their carbon emissions. There is growing recognition that enacting these commitments may present investment risks and opportunities.

Whether to facilitate the transition toward a low-carbon economy or to mitigate potential climate-related risks, investors are now using a range of sustainable strategies to advance their environmental objectives – from fossil fuel divestment to low carbon investments to direct investments in renewable energy projects. We view the adoption of these types of investment strategies as playing a significant role in addressing our global environmental challenges.

Over the past 46 years, Earth Day has served as a catalyst for many environmental protection initiatives and successes. As we celebrate Earth Day at BlackRock, we remain dedicated to providing investors with innovative sustainable investing tools and solutions to advance positive environmental outcomes.

Deborah Winshel is Global Head of Impact Investing at BlackRock.

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