BlackRock touts ESG performance amid market volatility

On the firm’s Q1 earnings call, executives said its sustainable initiatives have proven fruitful amid the covid-19 crisis.

ESG initiatives have delivered strong performance amid the covid-19 crisis, BlackRock chief executive Larry Fink said during the firm’s first quarter earnings call on Thursday.

“The pandemic we’re experiencing now is further highlighting the value of sustainable portfolios. We’ve seen sustainable portfolios deliver stronger performance than traditional portfolios during this period,” he said. “Throughout the recent market volatility, one enduring trend has been the move to sustainable investing.”

BlackRock recently closed on $5.1 billion for a global energy and power infrastructure fund that will invest in areas including solar, wind and hydro power as well as natural gas and energy transportation and storage.

The firm also reported one of the best quarters in illiquid alternatives ever.

Fink focused much of his remarks on the key drivers of growth during the last few weeks, crediting its iShares ETFs; illiquid alternatives; Aladdin, the firm’s portfolio and risk management platform; and sustainable investing as among key drivers. Sustainable ETFs alone brought in $10 billion in net inflows, its best quarter in history, Fink said.

The firm has relied heavily on Aladdin to help the firm transition to working from home, adapt to added stresses on operations and maintain its business continuity plan, the firm’s executives noted on the call.

“Our performance during the quarter would not have been possible without a unifying technology, and careful business continuity planning,” said Fink. “I’m incredibly proud in how Aladdin has enabled us to rebuild BlackRock beyond its walls to deliver the operational resilience.”

But the crisis has taken its toll on the firm – due to significant global market declines, BlackRock enters the second quarter with an estimated base fee run rate that is approximately 12 percent lower than Q1, chief financial officer Gary Shedlin said on the call.