BlackRock Inc. Chief Executive Officer Larry Fink said that public and private sectors will need to work together to confront climate change.
“Governments worldwide are going to need to invest in the R&D of how to prepare for climate change, in helping us design and build new technologies,” he said Wednesday at Bloomberg’s “The Year Ahead” virtual conference during an interview with Editor-in-Chief John Micklethwait.
BlackRock revealed new climate commitments earlier this week, building on Fink’s proclamation last year that global warming would reshape finance. Fink, 68, asked companies to reveal their plans to adjust to a net-zero economy — defined as one that emits no more carbon dioxide than it removes from Earth’s atmosphere by 2050.
BlackRock, the world’s largest asset manager with about $8.7 trillion at year-end, also said it would hold companies accountable if they fail to progress toward such goals, threatening to vote against management or flag shares for removal from its active portfolios.
Fink has been increasingly vocal on climate change in recent years, advising corporate leaders that a warming world will reshape all industries. Activists have criticized the company for its voting record on climate-related shareholder proposals, saying it should use its power to push for swifter change.
In a report last year, BlackRock said it had singled out 244 companies for failing to sufficiently address climate risk in their business models and took voting action against 53 of them. The rest remain “on watch,” and risk having BlackRock vote against management in this year if they don’t improve.
About two-thirds of BlackRock’s assets are in passive index-tracking funds, which include companies that produce fossil fuels, making it tricky to perform a true environmental overhaul quickly.
Fink said at the Bloomberg event that his letters on the climate crisis come from a perspective of investing for the long term.
“I’m doing this as a capitalist, who truly believes climate change is investment risk,” he said.
Fink also addressed the U.S.-China rivalry. Even as tensions between the two global powers heightened during the pandemic, he expressed optimism about the opening of China’s investment industry.
“We see evidence all throughout the world of capital coming into China,” Fink said. “I’ve had many conversations with Chinese leaders to ensure that as more capital comes into China, that China is doing everything they can to make sure their listing standards, their financial-statements standards, are equivalent and as good as anywhere else in the world.”
Fink weighed on Bitcoin, too, saying the virtual currency has a long way to go to reach widespread acceptance.
“People are fascinated about it,” Fink said. “It could be another store of wealth. But right now, it’s still untested. It has huge volatility.”
BlackRock took a tiny step into the world of virtual currencies earlier this month, adding Bitcoin futures as an eligible investment to two of its funds.
This article was provided by Bloomberg News.