BlackRock: 75 Percent of Assets to be Net Zero-Aligned by 2030

BlackRock projected at least 75 percent of assets managed for clients would be in issuers with science-based targets for climate change by 2030.

The world’s largest asset manager, BlackRock, estimated that the lion’s share of its corporate and sovereign assets managed for clients would be with issuers with targets for stemming their climate impact.

That compares with around 25 percent of its assets under management (AUM) currently, BlackRock said in a statement published on its website last week. As of end-2021, BlackRock had around $10.01 trillion in AUM.

Better Outcomes

«We believe investors and issuers that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes,» BlackRock said. «Climate risk and the economic opportunities from the transition are a top concern for our clients and a rapidly growing share of them have already committed to net-zero aligned portfolios.»

However, the asset manager said there were no plans for broad divestment from carbon-intensive companies, instead expecting to remain a long-term investor in those assets.

No Divestments Planned

«A portfolio fully divested of such sectors in the near term may be at odds with enabling an orderly transition to a net-zero economy in the long term,» BlackRock said.

BlackRock isn't alone in seeing carbon-intensive assets as necessary for transition.

Indeed, in November 2021, as part of its goals to cut greenhouse gas emissions (GHG), the Asian Development Bank (ADB) launched an energy transition mechanism (ETM) with Indonesia and the Philippines to buy and operate existing coal-fired power plants and then retire them earlier than their originally projected lifespans. At the same time, the ADB will also invest in replacing the electricity generation with renewable resources.

The ADB said at the time that fully scaling up the ETM in Indonesia, the Philippines and possibly Vietnam could result in retiring 50 percent of the coal fleet over the next 10 to 15 years.