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BlackRock Tactical Opportunities Inv A PCBAX Sustainability

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Sustainability Analysis

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Sustainable Summary

BlackRock Tactical Opportunities Fund may not appeal to sustainability-conscious investors.

BlackRock Tactical Opportunities Fund's holdings are exposed to average levels of ESG risk relative to those of its peers in the Global Macro category, thus earning it an average Morningstar Sustainability Rating of 3 globes. Competing funds in the category with ratings of 4 or 5 globes have less ESG risk in their holdings. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.

The fund has an asset-weighted Carbon Risk Score of 7.28, indicating that its current equity and/or bond holdings have low exposure to carbon-related risks. These are risks associated with the transition to a low-carbon economy such as increased regulation, changing consumer preferences, technological advancements, and stranded assets. The fund aims to avoid, or limit exposure to, companies in violation with international norms, such as the UN Global Compact or the Universal Declaration of Human Rights.

One potential issue for a sustainability-focused investor is that BlackRock Tactical Opportunities Fund doesn’t have an ESG-focused mandate. Funds with an ESG-focused mandate are more likely to align with the expectations of an investor who cares about sustainability issues. The fund's current involvement in fossil fuels reaches 8.98%, surpassing 4.20% for its average category peer. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas. By prospectus, the fund aims to avoid, or limit its exposure to, companies associated with controversial weapons, tobacco, thermal coal, and small arms. Yet this goal is far from achieved, as the fund exhibits 2.3%, 0.45%, 2.1%, and 1.2% exposure to controversial weapons, tobacco, thermal coal, and small arms, respectively. This compares with 0.46%, 0.28%, 0.69%, and 0.29% for its average peer in the Global Macro category.

The fund has a modest level of exposure (8.70%) to companies with high or severe controversies. Companies with high or severe controversies are involved in incidents such as corruption, employee abuses, environmental incidents, and corporate scandals that pose serious business risks to the company.

ESG Commitment Level Asset Manager

An ESG Commitment Level Asset Manager rating is not assigned to this investment.

Morningstar analysts award an ESG Commitment Level Asset Manager ratings to investments that also receive Morningstar Analyst Ratings. Not all investments currently have Asset Manager rating. Morningstar is expanding its coverage, prioritizing investments that are most relevant to investors.