The world’s largest asset manager wants to turn the financial opportunity in climate sustainability into quantifiable measures.

New York-based BlackRock today released its first “climate aware” capital market assumptions. With these, the firm declares that the transition to green energy will boost the economy and maintains that sustainable asset classes will be more likely to outperform than their peers.

In a press conference Thursday, the BlackRock Investment Institute argued that an orderly transition to “net zero” carbon emissions in energy and transportation could result in an economic output that’s 25% higher over the next two decades than it would be if no action were taken to prevent climate change at all.

While it stops short of naming sustainability as an investment risk premium or factor in the analysis of a company, BlackRock has come very close to describing it as one that stands aside a company’s size, quality and growth.

“Last year, we put out the view that climate risk is investment risk,” said Rich Kushel, head of BlackRock’s portfolio management group and a member of BlackRock’s global executive committee. “That was based on a two-part investment thesis, the first being the impact from sustainability in general and that climate risks weren’t being fully recognized by the market.” The second part of the thesis, he said, is “that there would be a significant reallocation of capital towards issuers that sustained positive sustainability characteristics and away from those that had negative characteristics.”

“Our view was that both of those things would be reflected in asset prices over time, and because of that, we spent last year making notable changes in the way we manage money,” Kushel said.

Sectors like technology and health care are poised to outperform sectors like energy and utilities, BlackRock reasons, since they have relatively lower exposure to climate risk. The spread in performance between the sectors that are best aligned with net-zero emissions goals and those that aren’t could be as large as 7%, according to the company.

Thus, BlackRock is pivoting its long-term estimates of risk and return to favor more developed market equities at the expense of high-yield and emerging-market debt, since developed market equity indexes contain larger weights to sectors like health care and technology and developed economies will be less vulnerable to the risks of a transition to a net-zero economy.

“We think that the climate transition will be a persistent driver of returns,” said Jean Boivin, head of the BlackRock Investment Institute.

For its new assumptions, BlackRock considered climate costs at three separate levels.

The first is macroeconomic inputs, including GDP growth, where the firm derived its assumption of an additional 25% in economic growth. The company believes that climate sustainability will cause changes in existing risk premiums in all asset classes.

Next, BlackRock considered how sustainable assets would be repriced—the premium investors are willing to put on sustainable assets instead of those involved in the emission of carbon dioxide and other greenhouse gases. Previous BlackRock research found that investors, on average, plan to double their allocation to sustainable assets over the next five years, and that will mean a declining cost of capital for sustainable assets, allowing them to provide higher returns than their peers. The company argued that these higher returns are not yet reflected in asset prices.

“It occurred to us that sustainability and climate [are] not fully in the prices; neither is the capital reallocation phenomenon that is starting and will continue,” said Boivin. “That means this will be a driver of returns, not a drag on returns. The moment you realize that this is the case, it becomes a central asset allocation question and not a question of what you exclude, but it’s about how you construct a portfolio.”

Finally, the developers of the new capital market assumptions considered fundamentals—the costs and opportunities that each company faces in contending with climate change. BlackRock examined the way certain companies were positioned to adapt to the net-zero transition. Climate sustainability should impact profitability across sectors, said BlackRock, and will impact other variables like credit default and downgrade assumptions.

While there is still a lot of uncertainty about the actual costs and benefits of battling climate change, BlackRock thinks there is enough known about climate-related input within environmental, social and governance investing (ESG) to predict some likely measurable impacts. Other areas of the ESG spectrum, like corporate governance and social responsibility, remain important, but their impacts are more difficult to measure, the company said.