Blackrock, a platform worth over 100 billion to invest in the transition

Money and the environment can no longer ignore each other. Governments have noticed, and banks have noticed: Investing money now has a responsibility to the planet, and if no one has noticed it yet, just read the message that Blackrock – the world’s first asset manager with $117.6 billion in assets and ever – Growing fondness for sustainability – sent to his customers. In his speech to CEOs, the same founder Larry Fink took a not-so-subtle stance: Companies do better when they are aware of their role in society, he noted and then added that decarbonizing the global economy will create the greatest investment opportunity of our lifetime. That is why today’s message is worth keeping in mind.

According to our recent survey, 56% of global institutional investors plan to increase their allocation to transformation strategies in the next 1-3 years, wrote Vice President Philip Hildebrand, Head of EMEA Stephen Cohen and Head of Sustainability & Transition Solutions Jessica Tan. So what does the investment fund founded by Larry Fink do? It broadens the choice of products and strategies to reach the transition to a low carbon economy. We currently have a transition investment platform worth more than $100 billion – note the three senior managers – and we continue to innovate for and with customers to meet their demands. In June, we began raising money for our fourth year climate infrastructure franchise. The strategy includes investments in infrastructure that favor transition, including wind power, solar power, battery energy storage, and sustainable mobility; launched a new active strategy that showcases carbon-intensive companies with credible transition plans and/or availability of materials for a low-carbon transition; announced five new index products to offer options for investors looking to integrate index investing into the transition, including 2 ETFs with broad exposure to climate and 3 strategies focused on critical metals, including lithium and copper.

Blackrock also invests to achieve the best risk-adjusted returns in line with clients’ objectives. Last year it launched Transition Capital, a unit that brings together experts to identify and invest in transition-related opportunities across the equity investment spectrum. And also in June, at the company level, he created the Transition Capital Investment Committee, which includes some of the company’s top investors. To give some concrete examples, BlackRock Equity Private Markets has also recently announced investments in portfolio companies, such as Scotland’s largest power grid stabilization project; Superior quality battery in Australia that will be the largest of its kind in the world when manufactured; Swedish manufacturer of electric vehicle batteries; A joint venture to develop, install and operate a zero-emission public charging and hydrogen refueling network in the United States; An industrial gas supplier in South Korea. Canadian provider of environmental and waste management solutions; A renewable energy developer in the Philippines is building large-scale solar plants.

Moreover, according to the US Fund, structural changes associated with the low-carbon transition are reshaping production and consumption and stimulating capital investment. We expect average annual investment in the energy system to rise to $4 trillion by 2050, up from $2.2 trillion in recent years, write Hildebrand, Cohen, and Tan. To help investors assess and navigate these changes, we have built a suite of proprietary models, powered by Aladdin that aim to provide an input-based prediction of how the low-carbon transition will occur across technologies, sectors and regions. We publish the BlackRock Institute for Investments (BIITS) transition scenario using these models, based on input assumptions that BII considers realistic today, including proprietary energy information, climate, macroeconomics, and third-party research. BIITS is designed to help investors analyze the “turning points” and “turning points” of the transition process.