Larry Fink, chief executive officer of BlackRock Inc., pauses ahead of a Bloomberg Television interview at the Blackrock Inc. wealth symposium in Zurich, Switzerland, on Thursday, March 7, 2019
Stefan Wermuth | Bloomberg via Getty Images
The chief of the world’s largest money manager believes the intensifying climate crisis will bring about a fundamental reshaping of finance, with a significant reallocation of capital set to take place “sooner than most anticipate.”
In an annual letter to CEOs published Tuesday, BlackRock Chief Executive Larry Fink said: “Climate change has become a defining factor in companies’ long-term prospects … But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”
BlackRock’s assets under management totaled almost $7 trillion in the third quarter of 2019.
Fink’s comments come as business leaders, policymakers and investors prepare to travel to Davos, Switzerland for the World Economic Forum next week.
The theme at this year’s January get-together, which is often criticized as out of touch with the real world, has been designated as “Stakeholders for a Cohesive and Sustainable World.”
“Climate change is almost invariably the top issue that clients around the world raise with BlackRock. From Europe to Australia, South America to China, Florida to Oregon, investors are asking how they should modify their portfolios,” Fink continued.
“And because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself.”
“In the near future — and sooner than most anticipate — there will be a significant reallocation of capital,” he added.
‘Defining issue of our time’
The United Nations (UN) has recognized climate change as “the defining issue of our time,” with a recent report calling the crisis “the greatest challenge to sustainable development.”
Alongside 20 other young climate activists, Sweden’s Greta Thunberg has called on all of those attending the World Economic Forum in the Swiss Alps to stop the “madness” of ongoing investments in fossil fuel exploration and extraction and “completely divest” from fossil fuels.
In an op-ed for The Guardian, published Friday, Thunberg — who was catapulted to fame for skipping school every Friday to hold a weekly vigil outside Swedish parliament in 2018 — said global leaders must also “end all fossil fuel subsidies.”
Protesting against political inaction over climate change, the 17-year-old sparked an international wave of school strikes — also known as “Fridays for Future” — with millions of other children following suit in cities around the world.