The world’s largest investment manager has hailed sustainable investing as part of the “mainstream” and no longer “niche”.

In its latest global insights report, BlackRock said about $760 billion (£581bn) was invested in sustainable funds across Europe and the United States in 2018, up from $453bn five years earlier.

The report said that financial products with an environmental, social and corporate governance (ESG) focus gave an annual return of 14.5% last year in the United States, compared with 14.4% for those without any ESG criteria.

Across the rest of the world, ESG-focused investments outperformed by 8.1% against 7.7%.

‘Cannot afford to ignore’ sustainable investment

Brian Deese, Global Head of Sustainable Investing at BlackRock, said: “For years, many investors saw sustainable investing as a trade-off – they viewed it as a sacrifice of value for ‘values’.

“There is now increasing awareness that material sustainability-related factors can be tied to a company’s long-term growth potential.

“This makes sustainable investing something investors can no longer afford to ignore.”

> Download BlackRock’s report