How BlackRock Uses Alternative Data for Impact Investing
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Impact investing — that is, investing with a cause in mind — is becoming increasingly popular.
Millennials are twice as likely to invest in companies that have a positive impact on society, and that generation is set to invest around $40 trillion over the next three decades.
Big-name investors are talking excitedly about environmentally sustainable infrastructure investments. The world’s biggest insurer, Axa, recently ditched tobacco stocks. And the market for green bonds, where the proceeds are used for environmentally friendly projects, is booming.
The problem for these kinds of investors and investments is the lack of data to measure environmental impact.
Most data on environmental, social, or governance factors comes from a single source: reports from the companies themselves. Finding new data to make sustainable outcomes measurable — and increasing the transparency around how that data is reported and measured — is key.
BlackRock, the world’s largest investor with $4.6 trillion in assets, is working to address that very problem. The company’s Impact team has partnered with its scientific active equity, or SAE, to pull together new insights on the impact of their investments.