BlackRock (BLK) is scrapping Environmental Social Governance (ESG) investing and instead pivoting to focus solely on the environmental component, rebranding it as “transition investing.” Tariq Fancy, Former BlackRock Chief Investment Officer of Sustainable Investing and Founder of The Rumie Initiative, joins Yahoo Finance Live to discuss this strategic shift.

Fancy says the criticism of ESG “expedited a process that was probably going to happen anyway.” He notes that ESG investing “lumped together a whole bunch of ideas” that were not inherently similar. Moving just the environmental aspect into “transition” investing is “a natural way” for markets to “move forward,” in his view.

He explains that BlackRock “has all different kinds of investment groups” aiming to create “additionality” or “real world impact.” Fancy believes “the backlash” will allow BlackRock to hone and refine its sustainable investing strategies accordingly.

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Editor’s note: This article was written by Angel Smith