Climate Risk is Investment Risk

  • Geraldine Buckingham, Chair and Head of Asia Pacific 

  • Climate change is a top issue raised by BlackRock clients, not just in APAC but around the world. They want to understand how sustainability is changing risk management and long-term investment outcomes. There is growing recognition of the reality that climate risk is investment risk. And BlackRock believes this realisation is about to transform finance and investing as we know it and sooner than we think.

    We believe sustainability should be our new standard for investing. Think about it, how does climate risk impact on prices, cost and demand across the entire economy? Infrastructure is a growth engine in Asia, but how can cities fund such needs if climate risk reshapes the market for long-term bonds? And if drought and flooding, some of the cost of food soaring, how do policymakers manage inflation and interest rates? We believe investment risk from climate change would trigger a significant reallocation of capital and this would have a profound impact on the pricing of risk and assets. As a fiduciary, we have a responsibility to help BlackRock clients in Asia and around the world navigate this important transition.

    Integrating sustainability into all aspects of investment management is an opportunity to drive better risk-adjusted returns to our clients. That is why we are making sustainability the new standard at BlackRock. It is fundamental to how we invest, manage risks, construct portfolios, build products and engage with the companies in which we invest. Every government, company and shareholder must confront climate change. We recently announced a set of specific steps we are taking to advance this effort in an open letter to CEOs and clients.

    I speak on behalf of all my colleagues in Asia Pacific in saying we look forward to engaging with you on this critical topic.