BlackRock goes green

The asset management giant joins 41 trillion dollar pact to tackle climate change – that is even more important than it sounds

Climate Action 100+, an influential big-money pact, has a new prominent member: asset management behemoth BlackRock (here). It´s 6.8 trillion dollars of AUM bring the amount controlled by the pact to 41 trillion dollars. The goal: push the world’s largest greenhouse-gas emitters to take action on man-made climate change and get them carbon neutral by 2050.

In my opinion, most investors still underestimate the pressure from institutions like this to change the way we energize our economies. We can already see the impact of these pacts and regulations when Saudi Aramco went public. It just has become very hard for institutional investors from Europe and the US to participate in an IPO of a company that makes money by extracting carbon from the ground to be burned (sure political tensions and human rights abuses didn´t help either).

In 2019 the Amazonas fires went on global news. 2020 started with apocalyptic pictures from Australia. If we start to see more of that kind of catastrophes, investors will feel even more pressure from NGOs and the public to act. And make no mistake: Exxon Mobil still has a lot of lobby power in Washington, but also 26 billion dollars of long- and short-term debt.