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BlackRock expects 75% of corporate investment assets to be covered by science-based targets by 2030

BlackRock has committed to reaching net-zero financed emissions by 2050 or sooner

The world’s largest investor holds around $10trn in assets under management and has been one of the most prominent net-zero advocates in the finance sector. Currently, around $1.8trn worth of assets – namely corporations and sovereign governments – that it invests in having science-based targets in place.

BlackRock released a statement late last week claiming that 75% of its assets will be covered by science-based targets by 2030.

“Because an orderly transition to net-zero by 2050 would benefit the global economy and our clients in aggregate, we believe that by 2030, all issuers would benefit from developing and implementing robust transition plans,” the firm said in an emailed statement, reported by Bloomberg.

The firm, which is the world’s largest investor, signed on to the UN-convened Net Zero Asset Managers Initiative last March. In doing so, it committed to reaching net-zero financed emissions by 2050 or sooner, in a manner aligned with climate science. Members are also required to disclose climate risks in line with the Task Force on Climate-Related Financial Disclosures’ (TCFD) framework.

The investor recently sent a letter to clients outlining its next plans for supporting them in the net-zero transition. The letter states that BlackRcok has been “hearing a range of questions about the transition from clients”, including minimising physical and transition risk, backing promising new low-carbon technologies and measuring portfolio emissions.

In a bid to help answer these questions, BlackRock has pledged to launch a ‘Transition Scenario’ in the coming months, mapping out the speed and shape that decarbonisation is expected to take in different geographies. It will also launch a tool identifying the companies that are best prepared for the net-zero transition, from large corporates to smaller cleantech innovators. This latter tool will be called ‘BlackRock Sustainable Investing Intelligence’.

Last year, BlackRock unveiled two new temperature-based exchange funds aimed at helping investors align portfolios with the pathways of the Paris Agreement.

BlackRock had launched the iShares S&P 500 Paris Aligned UCITS ETF (UPAB) and the iShares MSCI World Paris Aligned UCITS ETF (WPAB) exchange traded funds (ETFs) with the aim of helping investors mitigate against the climate crisis.

The funds are designed to mitigate financial exposure to both physical climate risks and transitional risks as the globe moves towards a low-carbon economy. As such, the products assist investors in screening out exposure to fossil fuels, controversial weapons, high carbon electricity generation, and social norm violators.

The funds meet the minimum standards of the EU Paris Aligned Benchmark label, an investment benchmark that incorporates criteria related to emissions reductions, and are categorised as Article 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR), which applies to investment projects that have sustainability as a key objective.

 

 

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