SUSTAINABILITY AT BLACKROCK

BlackRock’s 2030 net zero statement

At BlackRock, we believe that climate risk is investment risk, and we strive to help our clients make the most informed choices to improve their investment 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. 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.

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. However, the Russian invasion of Ukraine is a stark reminder of the challenges of a just and orderly energy transition. These events may drive short-term increases in demand for fossil fuels and associated emissions in some regions, while potentially accelerating investments into renewable energy in Europe and other regions where energy security goals are aligned with decarbonization.

Our clients’ portfolios – which reflect the global economy – cannot reach net zero without sustained and consistent government policy, accelerated technological breakthroughs, and substantial adaptation in corporate business models. These portfolios will reflect the regulatory and legislative choices governments make to balance the need for reliable and affordable energy, and orderly decarbonization.

BlackRock’s role in the transition is as a fiduciary to our clients. Our role is to help them navigate investment risks and opportunities, not to engineer a specific decarbonization outcome in the real economy. The money we manage is not our own – it belongs to our clients, many of whom make their own asset allocation and portfolio construction decisions.

We focus on providing our clients with data and analytics, investment insights and thought leadership about the impacts of the energy transition on their portfolios. We offer a range of products and strategies from which they can choose to achieve their desired outcomes, including strategies designed to help clients navigate or accelerate the net-zero transition. We also engage with the companies in which our clients are invested to promote sound corporate governance and business models necessary to building and sustaining value over time. And in October 2021, we began expanding the opportunity for certain clients to directly participate in proxy voting decisions.

We expect to remain long-term investors in carbon-intensive companies, because they play crucial roles in the economy and in a successful transition. The success of these companies will be critical to the global economy, the world’s low carbon ambitions and our clients’ long-term financial goals. We do not pursue broad divestment from sectors and industries as a policy – particularly as 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.

Currently, approximately 25% of BlackRock assets under management (“AUM”) with respect to corporate and sovereign issuers is invested for clients in issuers with science-based targets or equivalent. As the transition proceeds and issuers and asset owners continue to position themselves in front of it, we anticipate 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.

Review our 2021 TCFD report addendum for additional details on our 2030 net zero statement.