Investing in the transition to a low-carbon economy

It’s no longer a question of whether the net zero transition will happen, it's how. And we believe the transition presents extraordinary investment risks and opportunities for our clients. So how do we navigate the transition given its uncertain and uneven path?


As the transition becomes increasingly pivotal to investment goals, we are here as a fiduciary to help provide investors with the answers and tools needed to achieve long-term investment objectives.


Interested in delving deeper?

Philipp Hildebrand: An extraordinary opportunity lies ahead of us.

Alex Brazier: We're here to talk, not just about, the why but the how (of transition investing.)

Isabelle Mateos y Lago: the concept of going from shades of brown to shades of green

Title: Speed matters!

Paul Bodner: This is after all the induced change to the economy ever attempted and speed matters.

Emily Woodland: If Asia doesn’t get the transition right, the world doesn’t.

Mark McCombe: The question of the transition and how to navigate it is real for everyone.

Larry Fink: We want to have a conversation with more and more companies moving towards new technologies on decarbonization.

Title: We have to focus on innovation

Mark Wiedman: So to get to real zero. What's the number one thing that has to happen.

Francesco Starace: We have to focus on innovation. Innovation will get there.

Nicholas Chui: The investment opportunities within the public markets has only grown by leaps and bounds

Carolyn Weinberg: We believe investors cannot meaningfully reduce transition risk without navigating these core portfolio obligations.

Tom Donilon: Geopolitics has really come to the energy markets, that’s really kind of the headline.

Sandy Boss: We recognize the commitment and competence of many of these companies. They recognize that the transition is now. They understand that is important to have great plans and great action. Excellent capital expenditure plans. Business models that are dramatically changing, sometimes over multiple decades with very clear targets. That said, not every company is on that same journey

Title: We want to make solutions, and solve problems

Manuela Sperandeo: I think the shift to sustainability has really, in my mind, changed and transformed the whole indexing ecosystem.

Jane Sloan:  Data is at the heart of ESG investing and we are using ESG data in many ways.

Larry Fink: We want to make solutions and solve problems. And what my commitment, if we can do that, is we are going to create more opportunities for great long-term investing.

Landing page disclosures:

This material is intended for information purposes only, and does not constitute investment advice, a recommendation or an offer or solicitation to purchase or sell any securities, funds or strategies to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The opinions expressed are as of June 2022 and are subject to change without notice. Reliance upon information in this material is at the sole discretion of the reader. Investing involves risks.

In the U.S. and Canada, this material is intended for public distribution.

In the UK and Non-European Economic Area (EEA) countries: this is Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock.

In the European Economic Area (EEA): this is Issued by BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Registered office Amstelplein 1, 1096 HA, Amsterdam, Tel: 020 – 549 5200, Tel: 31-20-549-5200. Trade Register No. 17068311 For your protection telephone calls are usually recorded.

In Switzerland: This document is marketing material. Issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. Registered office: 12 Throgmorton Avenue, London, EC2N 2DL. Tel: + 44 (0)20 7743 3000. Registered in England and Wales No. 02020394. For your protection telephone calls are usually recorded.

In Italy, For information on investor rights and how to raise complaints please go to https://www.blackrock.com/corporate/compliance/investor-right available in Italian.

For investors in South Africa: Please be advised that BlackRock Investment Management (UK) Limited is an authorized financial services provider with the South African Financial Services Board, FSP No. 43288.

In Latin America: this material is for educational purposes only and does not constitute investment advice nor an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. If any funds are mentioned or inferred to in this material, it is possible that some or all of the funds may not have been registered with the securities regulator of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Uruguay or any other securities regulator in any Latin American country and thus might not be publicly offered within any such country. The securities regulators of such countries have not confirmed the accuracy of any information contained herein. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx

In Singapore, this is issued by BlackRock (Singapore) Limited (Co. registration no. 200010143N). This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

In Hong Kong, this material is issued by BlackRock Asset Management North Asia Limited and has not been reviewed by the Securities and Futures Commission of Hong Kong.

In Australia, issued by BlackRock Investment Management (Australia) Limited ABN 13 006 165 975, AFSL 230 523 (BIMAL). This material provides general information only and does not take into account your individual objectives, financial situation, needs or circumstances. Before making any investment decision, you should assess whether the material is appropriate for you and obtain financial advice tailored to you having regard to your individual objectives, financial situation, needs and circumstances.

© 2022 BlackRock, Inc. All Rights Reserved. BLACKROCK is a registered trademark of BlackRock, Inc. or its subsidiaries in the United States and elsewhere. All other trademarks are those of their respective owners.

BlackRock hosted a Global Client Summit on transition investing

At our two-day Summit, BlackRock leaders, corporate executives and investors at the forefront of transition investing discussed the massive reallocation of capital, the implications of policy and geopolitics, the importance of data, and the role of innovation in driving the transition.

Why does the transition matter for our clients?

We are hearing a range of questions about the net zero transition and how it will unfold as the economy undergoes a profound transformation – how to hedge portfolios against physical risk and transition risk? What are the biggest investment opportunities? Which companies will thrive in the transition?

Solar power farm
Climate risk

Climate risk is investment risk

On top of physical climate risks, companies and asset owners must now grapple with the transition. The transition will reshape the global economy whether it is managed successfully or not.

Ocean wave along the sand
Net zero journey

The net zero journey has started

The net zero journey has started but it will be uncertain and uneven. It is driving stark changes in company fundamentals and asset valuations.

Drone view onto a row of greenhouses
Risk and opportunity

Investment risks and opportunities resulting from transition

Foresighted companies — including across carbon-intensive sectors — are transforming their businesses for decarbonization.

Futuristic Solar Thermal Power Station
Bottom line

Bottom line

Our bottom line: The speed and shape of the transition are deeply uncertain and investors cannot ignore it.

Image Cta-1,Headline-1,Pull Quote-1,Headline-2,Pull Quote-2,Image Cta-2,Pull Quote-3,Image Cta-3,Pull Quote-4
Video Player-2,Messaging Crosslink-1
Headline-3,Pull Quote-5,Paragraph-1,Paragraph-2,Pull Quote-6,Paragraph-3,Pull Quote-7,Paragraph-4,Pull Quote-8

The real leaders of net zero


The path to zero carbon plastic featuring Dow

Dow CEO Jim Fitterling talked with Mark Wiedman about how Dow is decarbonising its production processes and why circular economy can help rid our planet of plastic waste.

Quotation start

We need to make sure that the waste is managed properly. And one of the most effective ways to do that is to be able to create a market for that waste material.

Quotation end
Jim Fitterling CEO, Dow

The power of clean energy featuring ENEL

Francesco Starace, the CEO of the Italian power giant ENEL, joined Mark Wiedman to discuss how during his tenure he has overseen the expansion of clean energy and to share his vision for the future of energy.

Quotation start

The answer is digitalization. So you have to digitize the networks so that they go in two directions, not just in one, not just from the generation to the consumer, but from the consumer back, or to a consumer to another consumer.

Quotation end
Francesco Starace CEO, ENEL

The role of utility companies in the transition featuring Engie

Catherine MacGregor of global utility company Engie discussed the role of green hydrogen and why the cost and the speed of the transition are among her top concerns.
Quotation start

The incremental costs of the energy transition is something that one, we have to minimize, and two, we have to make sure that it is distributed in as socially responsible way as possible.

Quotation end
Catherine MacGregor CEO of Engie

Powering the transition through electrification and cross-sector

Peter Voser, Chairman of ABB, talked with Mark Wiedman about why the global tech company is focused on electrification and automation, the importance of cross-sector collaboration and how they are helping industrial sectors become more reliable, more efficient and less carbon intensive.
Quotation start

We need to break down some barriers, get out of our silo thinking, and actually collaborate and work as industries together.

Quotation end
Peter Voser Chairman of ABB

Investor approaches to the transition

The transition involves a massive transformation of our economy, of our world and how people buy and sell and make and move things. In this video series, BlackRock unpacks creative investor approaches to effectively navigate these changes.

Russia's invasion of Ukraine has caused a horrific humanitarian crisis, and the world has responded.
Nations and governments have severed financial and business ties with Russia and are seeking to reduce their reliance on Russian oil and gas.
This presents a fresh energy supply shock to many countries that were already facing high inflation from the restart of economic activity. 
[MUSIC PLAYING]
The impact will vary by region, and it will depend on the speed at which the West cuts its imports of Russian energy.
We believe the switch away from Russian energy will make inflation persistently higher while slowing growth in the short term, with Europe at higher risk of recession now.
We find that the cost of Europe's energy bill has soared to its highest level since the 1970s following this shock. That's twice the increase seen in the United States.
Energy security concerns are likely to make the global transition to net-zero carbon emissions more
divergent. More fossil fuel output from the United States and other non-Russian sources will be needed to meet the world's energy demands. But in Europe, we believe recent events will reinforce the transition in the long term.
In particular, we see the region making a bigger push now to renewables and electrification, as it looks to wean itself off Russian energy.
The bottom line, the energy shock will further boost inflation and dampen growth in the near term, while making the global transition to net zero more divergent.
[MUSIC PLAYING]

Russia's invasion of Ukraine has caused a horrific humanitarian crisis, and the world has responded.
Nations and governments have severed financial and business ties with Russia and are seeking to reduce their reliance on Russian oil and gas.
This presents a fresh energy supply shock to many countries that were already facing high inflation from the restart of economic activity. 
[MUSIC PLAYING]
The impact will vary by region, and it will depend on the speed at which the West cuts its imports of Russian energy.
We believe the switch away from Russian energy will make inflation persistently higher while slowing growth in the short term, with Europe at higher risk of recession now.
We find that the cost of Europe's energy bill has soared to its highest level since the 1970s following this shock. That's twice the increase seen in the United States.
Energy security concerns are likely to make the global transition to net-zero carbon emissions more
divergent. More fossil fuel output from the United States and other non-Russian sources will be needed to meet the world's energy demands. But in Europe, we believe recent events will reinforce the transition in the long term.
In particular, we see the region making a bigger push now to renewables and electrification, as it looks to wean itself off Russian energy.
The bottom line, the energy shock will further boost inflation and dampen growth in the near term, while making the global transition to net zero more divergent.
[MUSIC PLAYING]

Meet BlackRock leaders

We asked a few BlackRock executives, “What about your job at BlackRock makes you feel like you are positively contributing to the energy transition?”

Quotation start

Our platform invests in Real Estate and Infrastructure and has a direct impact on the transition to a low-carbon economy. Whether it is investing into LEED certified buildings, an offshore wind farm or electric vehicle charging stations, our investments help our clients achieve their goals and contribute to making the world a more sustainable place for my children and generations to come. This makes my job extremely exciting, and I am proud to be helping to decarbonize the world.

Quotation end
Anne Valentine Andrews Global Head of BlackRock Real Assets

 

Quotation start

Transitioning to a low-carbon economy is probably the most important and complex change to the global economy we will see in our lifetimes. Getting it right will shape the financial well-being of people all over the world, and it’s a privilege to be working on this issue here at the heart of the financial sector.

Quotation end
Paul Bodnar Global Head of Sustainable Investing

 

Quotation start

I’ve been passionate about and invested in the energy industry for decades, as it meets a basic human need, and is going through massive change as it transitions to a cleaner future. These changes are very complex and require major technological innovation, immense future capital expenditure and deep industry expertise. This intricate puzzle, as we transition, is both fascinating to me personally, and critical to the future of a net zero world.

Quotation end
Mark Florian Global Head of Diversified Infrastructure

 

Quotation start

The low-carbon transition is and will be the driving force to delivering a safe, global climate to future generations. It is also the driving ideal of my career to be part of an emerging, growing, and important sector of the policy and economic realms associated with the energy industry? From local meetings about project development, to conference rooms working out financing structures to the sites where jobs are created and clean energy is generated, transmitted, and utilized – the low-carbon transition delivers challenges and opportunities consistently. It is truly a local and global issue that is key to achieving a sustainable future.

Quotation end
David Giordano Global Head of Climate Infrastructure

Discover how our actions drive meaningful change globally

Across the world, we strive to advance sustainability as we believe the impact of climate risk poses not only environmental risk, but also investment risk. We are taking steps globally to mitigate those risks and help communities transition to a low-carbon economy.

Engineer: Are you comfortable with driving one? Because you will have Mark as the instructor.

Mark Weidman: Okay Just to be clear, I’ve never driven one

Engineer: Have you ever driven a normal car?

Mark Weidman: Once or twice

Engineer: It's the same, but a little bit longer but that's the only difference, and the weight of course.

Mark Weidman: Okay

Martin Lundstedt: This is the beauty

Mark Weidman: It is beautiful, fully electric?

Martin Lundstedt: Fully electric

Mark Weidman: Okay lets do it

Martin Lundstedt: Safety first

Mark Weidman: I agree with that. Especially if I am driving

Mark Weidman: This is the next frontier. Moving goods with zero carbon emissions in the fuel, and ultimately zero carbon emissions in the construction of this truck. We are seeing the future of transport.

Mark Weidman: Okay, we’re going

Martin Lundstedt:: Yeah, we go

Mark Weidman: Alright Okay it’s definitely moving

Mark Weidman: This is so fun

Martin Lundstedt:: Yeah it is actually and you feel how quite smooth it is right?

Mark Weidman: That is actually a pretty good turning radius.

Martin Lundstedt: Yeah it is

Mark Weidman: I’m driving a proper truck

Martin Lundstedt: Yeah, absolutely

Text: These trucks have a maximum range of 300 km (186 mi)

Text: and can be fully charged between 60-90 minutes.

Mark Weidman: We’re going once more

Martin Lundstedt:: Mark, that was great

Mark Weidman: Now the key is, don’t fall on the way down.

Text: Volvo Group’s electric trucks are expected to help the company meet its goal of 100% net zero vehicles by 2040.

Mark Weidman: This is the future of trucking

Engineer: Are you comfortable with driving one? Because you will have Mark as the instructor.

Mark Weidman: Okay Just to be clear, I’ve never driven one

Engineer: Have you ever driven a normal car?

Mark Weidman: Once or twice

Engineer: It's the same, but a little bit longer but that's the only difference, and the weight of course.

Mark Weidman: Okay

Martin Lundstedt: This is the beauty

Mark Weidman: It is beautiful, fully electric?

Martin Lundstedt: Fully electric

Mark Weidman: Okay lets do it

Martin Lundstedt: Safety first

Mark Weidman: I agree with that. Especially if I am driving

Mark Weidman: This is the next frontier. Moving goods with zero carbon emissions in the fuel, and ultimately zero carbon emissions in the construction of this truck. We are seeing the future of transport.

Mark Weidman: Okay, we’re going

Martin Lundstedt:: Yeah, we go

Mark Weidman: Alright Okay it’s definitely moving

Mark Weidman: This is so fun

Martin Lundstedt:: Yeah it is actually and you feel how quite smooth it is right?

Mark Weidman: That is actually a pretty good turning radius.

Martin Lundstedt: Yeah it is

Mark Weidman: I’m driving a proper truck

Martin Lundstedt: Yeah, absolutely

Text: These trucks have a maximum range of 300 km (186 mi)

Text: and can be fully charged between 60-90 minutes.

Mark Weidman: We’re going once more

Martin Lundstedt:: Mark, that was great

Mark Weidman: Now the key is, don’t fall on the way down.

Text: Volvo Group’s electric trucks are expected to help the company meet its goal of 100% net zero vehicles by 2040.

Mark Weidman: This is the future of trucking

Meet BlackRock leaders at the forefront of this transformational shift

Our leadership and investment teams are committed to help you navigate, drive, and invent the transition to a low-carbon economy.

Philipp Hildebrand
Vice Chairman
Mark Wiedman
Head International and of Corporate Strategy
Anne Valentine Andrews
Global Head of Real Assets within BlackRock Alternative Investors
Paul Bodnar
Global Head of BlackRock Sustainable Investing
Alex Brazier
Deputy Head of the Blackrock Investment Institute
Mark Florian
Head of BlackRock Global Infrastructure Funds
David Giordano
Global Head of Climate Infrastructure
Evy Hambro
Global Head of Thematic and Sector Based investing
Meghan Sharp
Global Head of Decarbonization Partners
Manuela Sperandeo
EMEA ETF and Index Investments Head of Sustainable Indexing
Carolyn Weinberg
Global Head of Product ETF and Index Investments
Kristen Weldon
Global Head of Alternative Investors Sustainable Investing