{"id":30,"date":"2020-01-16T21:07:55","date_gmt":"2020-01-16T21:07:55","guid":{"rendered":"https:\/\/www.esgtoday.com\/?p=30"},"modified":"2020-05-22T11:39:05","modified_gmt":"2020-05-22T11:39:05","slug":"blackrock-ceo-letter-highlights-climate-and-sustainability","status":"publish","type":"post","link":"https:\/\/www.esgtoday.com\/blackrock-ceo-letter-highlights-climate-and-sustainability\/","title":{"rendered":"BlackRock CEO Letter Highlights Climate and Sustainability"},"content":{"rendered":"\n<p><strong><em>Annual letter to CEOs focuses on climate change<\/em><\/strong><\/p>\n\n\n\n<p>In his annual letter to CEOs, BlackRock CEO Larry Fink\nindicated that the world\u2019s largest investment manager is getting serious about\nclimate change. <\/p>\n\n\n\n<p>\u201cOur investment conviction is that sustainability- and\nclimate-integrated portfolios can provide better risk-adjusted returns to\ninvestors,\u201d wrote Mr. Fink, \u201cand with the impact of sustainability on\ninvestment returns increasing, we believe that sustainable investing is the\nstrongest foundation for client portfolios going forward.\u201d<\/p>\n\n\n\n<p>BlackRock\u2019s letter laid out several climate-related challenges\nthat could impact the investing world over the coming years:<\/p>\n\n\n\n<p>\u201cWill cities, for example, be able to afford their\ninfrastructure needs as climate risk reshapes the market for municipal bonds?\nWhat will happen to the 30-year mortgage \u2013 a key building block of finance \u2013 if\nlenders can\u2019t estimate the impact of climate risk over such a long timeline,\nand if there is no viable market for flood or fire insurance in impacted areas?\nWhat happens to inflation, and in turn interest rates, if the cost of food\nclimbs from drought and flooding? How can we model economic growth if emerging\nmarkets see their productivity decline due to extreme heat and other climate\nimpacts?\u201d<\/p>\n\n\n\n<p>Other uncertainties outlined in the letter include determining\nthe scale and scope of government action on climate change, the speed of the long-term\ntransition to a low-carbon economy and gauging the world\u2019s ability to overcome\nthe technological hurdles involved in that energy transition.<\/p>\n\n\n\n<p><strong>Taking action\u2026<\/strong><\/p>\n\n\n\n<p>Beyond just discussing the risks of climate change, Mr. Fink\ndescribes concrete action BlackRock is taking in its portfolios, including \u201cmaking\nsustainability integral to portfolio construction and risk management; exiting\ninvestments that present a high sustainability-related risk, such as thermal\ncoal producers; launching new investment products that screen fossil fuels; and\nstrengthening our commitment to sustainability and transparency in our\ninvestment stewardship activities.\u201d <\/p>\n\n\n\n<p>As ESG Today <a href=\"https:\/\/www.esgtoday.com\/blackrock-joins-climate-action-100\/\">reported earlier<\/a>, Blackrock has recently joined Climate Action 100+, a network of investment managers dedicated to promote cleaner practices among large corporations.<\/p>\n\n\n\n<p><strong>\u2026 and a call to action<\/strong><\/p>\n\n\n\n<p>BlackRock\u2019s letter concludes with a call to action from CEOs\non broader ESG issues, warning that companies that take a near-sighted view of\nmaximizing profits at the expense of sustainable business practices run the\nrisk of long-term irrelevance:<\/p>\n\n\n\n<p>\u201cAs I have written in past letters, a company cannot\nachieve long-term profits without embracing purpose and considering the needs\nof a broad range of stakeholders. A pharmaceutical company that hikes prices\nruthlessly, a mining company that shortchanges safety, a bank that fails to\nrespect its clients \u2013 these companies may maximize returns in the short term.\nBut, as we have seen again and again, these actions that damage society will\ncatch up with a company and destroy shareholder value.\u201d<\/p>\n\n\n\n<p>BlackRock\u2019s key message to CEOs is that \u201c<strong>Ultimately,\npurpose is the engine of long-term profitability.<\/strong>\u201d<\/p>\n<!--themify_builder_content-->\n<div id=\"themify_builder_content-30\" data-postid=\"30\" class=\"themify_builder_content themify_builder_content-30 themify_builder tf_clear\">\n    <\/div>\n<!--\/themify_builder_content-->\n<span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>Annual letter to CEOs focuses on climate change In his annual letter to CEOs, BlackRock CEO Larry Fink indicated that the world\u2019s largest investment manager is getting serious about climate change. \u201cOur investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors,\u201d wrote Mr. Fink, \u201cand with the impact of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":31,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[3,12,2],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.8.1 - 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