BlackRock taps fintech startup to bolster ESG investing
The asset manager will integrate Clarity AI’s data into the Aladdin tool as social and economic factors push investor appetite for ESG investing. Demand for sustainable investing accelerated last year with global investors in mutual funds and ETFs investing $326 billion in sustainable assets.
BlackRock Inc. is hoping to make it easier for advisers and investors to measure impact investing performance with fintech startup Clarity AI, an environmental, social and governance investing data provider.
BlackRock announced Thursday its minority investment in the startup and plans to integrate Clarity AI’s data into the Aladdin management tool as social, economic and market factors accelerate investor appetite for a more sustainable approach to investing, according to the announcement.
The terms of the transaction were not disclosed.
Founded in 2017, Clarity AI is a societal impact rating agency that analyzes the societal impact of more than 30,000 companies, 200,000 funds and 400 countries and local governments for investment and corporate research.
Demand for sustainable investing accelerated last year with global investors in mutual funds and ETFs investing $326 billion in sustainable assets as of November 2020, a 97% increase compared with the prior year period, according to the announcement.
A recent BlackRock survey of global investors also showed that their allocations to ESG strategies are expected to double by 2025. However, 53% of respondents cited concerns about “poor quality or availability of ESG data and analytics” as their biggest barrier to adopting sustainable investing.
By integrating Clarity AI’s proprietary technology into the Aladdin management tool, clients can analyze a broader universe of companies, address their disclosure obligations and build more sustainable portfolios, according to the head of Aladdin sustainability at BlackRock Mary-Catherine Lader.
The investment and integration of Clarity AI comes on the heels of BlackRock’s announcement in November 2020 that it agreed to purchase Aperio, a pioneer in customizing tax-optimized SMAs, for $1.05 billion in cash from the private equity firm Golden Gate Capital.
That deal not only expands BlackRock wealth managers’ access to personalized tax-managed strategies, but also the broad market indexing and customized ESG portfolios for ultra-high net worth households and institutions served by private banks and the RIA market, according to the announcement.
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