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,” the sustainability nonprofit Ceres said in a statement.
“There’s no question that the transition to a net zero emissions economy is happening apace and all investors would be wise to adjust their investment strategies accordingly,” said Mindy Lubber, Ceres CEO and president. “When the largest asset manager in the world ups its goal from 25% of such assets invested in science-based-target issuers to 75% of those assets, others should take note. The climate crisis is a financial risk that will continue to affect valuations.”
BlackRock today announced 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.” 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.
Lubber noted, “The sheer size of the commitment is significant as all investors seek to address climate risks across capital markets. We will be working with BlackRock and other investors to develop the data and methodologies to focus on the asset classes excluded from BlackRock’s target and to measure the real emissions reductions that this alignment target represents.”
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 has been a member of Ceres Investor Network since 2008 and a signatory to Climate Action 100+ since 2020.
About Ceres
Ceres is a nonprofit organization working with the most influential capital market leaders to solve the world’s greatest sustainability challenges. Through our powerful networks and global collaborations of investors, companies and nonprofits, we drive action and inspire equitable market-based and policy solutions throughout the economy to build a just and sustainable future. For more information, visit ceres.org and follow @CeresNews.