Innovation on the road to net zero

We’re committed to helping more and more people experience financial well-being, and we believe the transition to a net zero economy by 2050 is a big part of that ambition. That’s why we’re dedicated to advancing climate innovation, research and analytics – to help our clients invest sustainably and build a net zero economy that serves us all.

Today, the world emits about 60 gigatons of greenhouse gas a year to power the economy and our lives.

So, think the food we eat, how we get places, where we work, how we live.

We can’t turn all of that off overnight but we can take steps to get on a path to a net zero world.

BBL open

Title: The net zero economy is arriving

Net zero is about reducing greenhouse gas emissions so that over time we can achieve an overall balance between emissions produced, and the emissions removed from the overall atmosphere. So, for every ton of greenhouse gas we emit into the air, we would take a ton out.

(Graphic text: Net zero = Greenhouse gas emissions produced ≤ emissions remove)

(Graphic/text animation) The latest science shows that if we reach net zero by midcentury, essentially if we achieve the goals outlined in the Paris Agreement, it would limit global warming to well below 2°C versus pre-industrial levels.* If we exceed that level, scientists say that we’ll suffer from the most detrimental climate impact.

*Source: Climate Council, “What does net zero emissions mean?,” 2020

(Graphic/ text animation)

To date, 127 governments around the world and over 1,000 companies have made or are preparing to make net zero commitments. And we expect that number to go up.

*Source: Climate Action Tracker, “Warming Projections Global Update” December 2020 and UN News, “UN chief stresses need for greater speed to achieve carbon neutrality,” November 9, 2020

This is also being reflected in the financial system. Regulators are making climate risk disclosure mandatory, central banks are stress testing for climate risk, and policymakers around the world are collaborating to achieve common climate goals.

Climate change is a collective problem that requires collective global action. People have to understand that achieving net zero in 2050 isn’t something we can start in 2049, we have to start today.

Lastly, and most importantly, as with any transition, we have to make sure it’s a just transition. We really have to work together to make sure that no one group, whether it’s a community or an industry gets disproportionately left behind.

The bottom line is that achieving global net zero emissions by 2050 is our best chance at mitigating the worst impacts of climate change. // This is going to a large structural change in our economy. // And companies that manage to evolve and adapt their business models are going to be rewarded by the financial markets over the long term.

What is net zero?

Watch our recent video featuring Jessica Tan, Head of Corporate Strategy, and read our new 101 guide to learn more about the net zero transition.

Why it matters

Climate risk is investment risk
Our responsibility to help clients navigate this change impacts everything we do, from managing portfolios to building products to engaging with other companies.
The net zero economy is arriving
This is a historic opportunity to invest in climate innovation, and we believe companies who evolve will be rewarded by financial markets over the long term.
People and planet can prosper together
Reducing environmental damage while boosting innovation enables us to build a more just, inclusive world – one where more and more people can prosper.

How do we advance sustainability at BlackRock?

By developing expert research and insights

In our products and technology

Through our engagements with companies

Through our business and our people

Larry Fink: We have some parts of the country that are very, very worried about what this transition will mean for their state, their locality, for their jobs. And so, this is not going to be an easy task. But I would say across the board, capital is moving, and it's going to move very rapidly. And I'm very proud that I can tell you right now; every hydrocarbon company in the United States is now focused on this whereas I would say three to four years ago, they weren't. They did not believe it. We are making change, and I would say we're making more rapid change because of Bill and other people who are expressing this openly.

Bill Gates: Well, the bulk of emissions in the decades ahead will come from developing countries. Let's think of it in three tiers. The rich countries: that's Europe, U.S., Japan. The middle income countries; that's where most of humanity lives. That's, you know, China on the high end – high middle income – and India on the low end. And you've got Brazil, Mexico, Indonesia, Vietnam, a lot of the world's population there. And then you have some very poor countries, a lot in Africa. The responsibility to innovate rests entirely on the rich countries, and particularly on the U.S., because the U.S. has the universities, the national labs; it's got the ability to organize risk-laden capital. We will not solve climate change without the rich world driving down dramatically. That will make it economic for the middle-income countries who are not responsible for the historic emissions and who are dealing with more basic needs.

Net zero: A global shift with local impact

Watch Larry Fink, Chairman and CEO of BlackRock, and Bill Gates, Founder of Breakthrough Energy, discuss the complex challenge of reaching net zero emissions and how the transition will spur innovation and accelerate change.

To achieve the global ambition of keeping global warming to 1.5 degrees, we need to rapidly decarbonize our economies to a point where we’ve got net zero emissions by 2050

BlackRock Bottom Line
Decarbonization and the road to a net zero economy

Teresa O’Flynn
Global Head of Sustainable Investing for BlackRock Alternatives Investors

So if we work back, we need to reduce carbon emissions by about 1.7 billion tons each year between now and 2050.
Source:, “Getting to zero: The most ambitious innovation effort in human history,” August 2020

To put that figure in context, COVID-19, which saw unprecedented disruption to economic activity and travel, saw carbon emissions fall by about two billion tons in 2020. 

Electrification of our energy systems, digitalization and technological advancement are all at the center of achieving decarbonization.

Decarbonization has three major components. Firstly, using less energy. Energy efficiency of equipment, of buildings, of manufacturing but also affecting the demand side so consuming less. Moving towards the shared economy.

Secondly, supplying the world with clean energy, such as green electricity. Also, the supporting infrastructure and storage capacity that’s necessary to deliver a fossil-free grid. Accelerating new energy sources such as hydrogen but also renewable fuels, particularly for those hard to decarbonize sectors such as aviation.

And finally, actively taking carbon out of the system. And this includes nature-based solutions such as reforestation but also developing the technology that will capture carbon from the atmosphere, store it and possibly utilize it.

Governments play a critical role in setting the right kind of policy and regulatory environment. And we’re also seeing ambition increase in the corporate sector. And so far, over 1,500 companies have set net zero targets. We’ve seen industry get together around the trickier to decarbonize sectors such as heavy industry and manufacturing. 

Bottom Line GFX

The bottom line is that the world is on a massive transformational path propelling us towards a zero-carbon and digital future. We believe that this represents a historic investment opportunity and that investors will be better served by being on the forefront of this transition.

Decarbonization and the road to a net zero economy

The world needs to reduce carbon emissions by approximately 1.7 billion tons each year to achieve net zero by 2050. So what is decarbonization, and how will it impact investors? Teresa O’Flynn, Global Head of Sustainable Investing for BlackRock Alternatives, discusses on this episode of BlackRock Bottom Line.