Our job is to think through and model different scenarios to understand implications for our clients’ portfolios.” Government policy, technological innovation, and consumer preferences will ultimately determine the pace and scale of decarbonisation. “It is not the role of an asset manager like BlackRock to engineer a particular outcome in the economy, and we don’t know the ultimate path and timing of the transition. We offer choice to help clients reach their investment goals, and we manage their assets consistent with their objectives and guidelines. We have clients who want to invest in ways that seek to align with a particular transition path or to accelerate that transition. “Our clients have a range of investment objectives and perspectives. “The transition to a low-carbon economy is top of mind for many of our clients,” Fink wrote. Fink states that it would be governments who need to enact policies to improve approaches to business practices. Whereas last year’s annual letter from Fink said that sustainability should act as the “north star” while capturing the “tectonic” shift towards sustainability and a net-zero future, the 2023 iteration of the letter scales back the focus and impetus on the low-carbon transition.įink has become a target for Republican lawmakers for his backing of ESG investing and the BlackRock chief executive used his letter to state that it was not the role of the finance sector to be the “environmental police”. Fink also described the $120bn that insurers had to spend to cover natural catastrophes in 2022 as a “once unthinkable figure”. That’s still the case,” Fink wrote, referencing the wildfires in California and flooding in Pakistan. “For years now, we have viewed climate risk as an investment risk. While Fink does not mention environmental, social, and governance (ESG) this year, a portion of the letter is dedicated to the low-carbon transition and the energy crisis. The central theme of Fink’s 2023 letter was that of an impending “regional banking crisis” and a current lack of political support to stimulate the economy. Fink’s annual letter was not addressed to chief executives this year, but rather “all stakeholders”, noting that they are all “facing so many of the same issues”.
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