BlackRock’s newly announced goal to invest 75% of its corporate and sovereign assets in issuers with science-based climate goals potentially “sets a new bar that could signal to the rest of the market that the investor transition to a net zero emissions economy is well underway.”

BlackRock towards net zero goals

BlackRock announced yesterday that it anticipates that “by 2030, at least 75% of BlackRock corporate and sovereign assets managed on behalf of clients will be invested in issuers with science-based targets or equivalent”, up from 25% currently

The firm did not specify what asset classes would be excluded from the goal. 

BlackRock joined the Net Zero Asset Managers (NZAM) initiative as a signatory in March 2021. Under this initiative, asset managers have committed to supporting the goal of net zero emissions by 2050 or sooner, in line with efforts to limit warming to 1.5-degress Celsius, and to show progress on what percentage of their assets are covered by this goal.

According to BlackRock’s target submission to NZAM, the scope of the target covers $7.3 trillion in assets under management, and excludes the firm’s real assets, infrastructure and private equity holdings. 

“BlackRock’s role in the transition is as a fiduciary to our clients. Our role is to help them navigate investment risks and opportunities, not to engineer a specific decarbonization outcome in the real economy. (…)

Our clients’ portfolios – which reflect the global economy – cannot reach net zero without sustained and consistent government policy, accelerated technological breakthroughs, and substantial adaptation in corporate business models.”

BlackRock statement

As damages from climate-related weather disasters grew to $145 billion in the U.S. alone last year and as the International Energy Agency warns of the need to cease development of fossil fuel assets, the investment and business community have come to discerning that climate risk is financial risk. BlackRock’s CEO famously said so two years ago in a letter that shook up the market. Today’s announced goal may also affect market peers’ climate ambition. 

BlackRock towards net zero goals

Source: Reuters, Ceres