Wait for it

18 May 2020 By George Hay Follow @gfhay

Environmental, social and governance-focused funds outperformed peers in the first quarter, new BlackRock research suggests. Steady inflows are encouraging given the fear investors would ditch ESG in a crisis. But one quarter alone is not enough to judge the sector.

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Global sustainable open-ended funds brought in $40.5 billion in new assets, a 41% increase year-over-year, BlackRock reported in a research published on May 18. U.S. sustainable funds attracted a record $7.3 billion for the quarter.

Morningstar reported 51 out of 57 of its sustainable indexes outperformed broad market counterparts, and MSCI reported 15 of 17 of its sustainable indexes outperformed broad market counterparts in the first quarter of 2020.

The Financial Times reported on May 17 that BlackRock had voted against resolutions calling for Australian oil companies Woodside Energy and Santos to set targets in line with the Paris climate change agreement. BlackRock said it had concerns about the bundling together of so-called Scope 3 emissions arising from customer usage of fossil fuel products with more direct emissions arising from oil and gas companies’ production processes.

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