I have seen how many companies are taking these challenges seriously – how they are embracing the demands of greater transparency, greater accountability to stakeholders, and better preparation for climate change. 2020 Tax Kit. And in the future, greater transparency on questions of sustainability will be a persistently important component of every company’s ability to attract capital. As a global investment manager and fiduciary to our clients, our purpose at BlackRock is to help everyone experience financial well-being. The world is moving to net zero, and BlackRock believes that our clients are best served by being at the forefront of that transition. The economy today remains highly dependent on fossil fuels, as is reflected in the carbon intensity of large indexes like the S&P 500 or the MSCI World, which are currently on trajectories substantially over 3ºC.2. Read our 2020 letter to clients Accountable and Transparent Capitalism Over the 40 years of my career in finance, I have witnessed a number of financial crises and challenges – the inflation spikes of the 1970s and early 1980s, the Asian currency crisis in 1997, the dot-com bubble, and the global financial crisis. Governments around the world, under severe fiscal strain from the pandemic, also need to undertake massive climate infrastructure projects, both to protect against physical risk and to deliver clean energy. © 2020 BlackRock, Inc. All rights reserved. We strongly support moving to a single global standard, which will enable investors to make more informed decisions about how to achieve durable long-term returns. that is, one where global warming is limited to well below 2ºC, consistent with a global aspiration of net zero greenhouse gas emissions by 2050. Issue: Proxy Advisors. TCFD reports are the global standard for helping investors understand the most material climate-related risks that companies face, and how companies are managing them. Tel: (02)23261600. We engage with companies to inform our voting and promote sound corporate governance that is consistent with sustainable, long-term value creation. Since 1999, we've been a leading provider of financial technology, and our clients turn to us for the solutions they need when planning for their most important goals. In the UK and inside the EEA: Until 31 December 2020, issued by BlackRock Investment Management (UK) Limited, authorised and regulated by the Financial Conduct Authority. And more recently, it has exacerbated the political turmoil in the U.S. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. In 2018, I wrote urging every company to articulate its purpose and how it benefits all stakeholders, including shareholders, employees, customers, and the communities in which they operate. Governments and the private sector must work together to pursue a transition that is both fair and just – we cannot leave behind parts of society, or entire countries in developing markets, as we pursue the path to a low-carbon world. The importance of serving stakeholders and embracing purpose is becoming increasingly central to the way that companies understand their role in society. No issue ranks higher than climate change on our clients’ lists of priorities. In the near future – and sooner than most anticipate – there will be a significant reallocation of capital. We recognize that reporting to these standards requires significant time, analysis, and effort. BlackRock is a fiduciary to our clients, helping them invest for long-term goals. It is not possible to invest directly in an index. AP Photo/Mark Lennihan, File On Larry Fink's 2020 Letter to CEOs. It is clear that being connected to stakeholders – establishing trust with them and acting with purpose – enables a company to understand and respond to the changes happening in the world. And this dynamic will accelerate as the next generation takes the helm of government and business. Climate change has become a defining factor in companies’ long-term prospects. 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." 1 Sources: Simfund, Broadridge, GBI. Außerdem kündigte Fink an, dass seine Firma auf mehr Transparenz hinsichtlich geschäftsspezifischer Klimarisiken pochen würde. Since 1999, we've been a leading provider of financial technology, and our clients turn to us for the solutions they need when planning for their most important goals. Results may vary for other index comparisons. Important progress improving disclosure has already been made – and many companies already do an exemplary job of integrating and reporting on sustainability – but we need to achieve more widespread and standardized adoption. BlackRock itself is not yet where we want to be, and we are continuously working to improve our own reporting. Larry Fink, CEO and Chairman of BlackRock, the world’s largest investment management firm, has sent out an annual letter to CEOs of the companies that BlackRock invests in on behalf of its clients since 2012. 200010143N). Assessing sustainability risks requires that investors have access to consistent, high-quality, and material public information. As I have written in past letters, a company cannot achieve long-term profits without embracing purpose and considering the needs of a broad range of stakeholders. Where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues, we will hold board members accountable. For your protection telephone calls are usually recorded. If we want these disclosures to be truly effective – if we want to see true societal change – they should be embraced by large private companies as well. I am encouraged by what I have seen from businesses. That means a successful transition – one that is just, equitable, and protects people’s livelihoods – will require both technological innovation and planning over decades. Momentum continues to build, and in 2021 it will accelerate – with dramatic implications for the global economy. We are a signatory to the UN’s Principles for Responsible Investment, and we signed the Vatican’s 2019 statement advocating carbon pricing regimes, which we believe are essential to combating climate change. < Read All AlphaSense News 15+ min read This week, BlackRock CEO and Founder Larry Fink released his 2021 Letter to CEOs, accompanied by BlackRock’s 2021 Client Letter. It’s not just that broad-market ESG indexes are outperforming counterparts. We believe that when a company is not effectively addressing a material issue, its directors should be held accountable. What will happen to the 30-year mortgage – a key building block of finance – if lenders can’t estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas? But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance. re is no company whose business model won’t be profoundly affected by the transition to a net zero economy – one that emits no more carbon dioxide than it removes from the atmosphere by 2050, the scientifically-established threshold necessary to keep global warming well below 2ºC. In one of the great triumphs of modern science, multiple vaccines were developed in record time. We need to move even faster – to create more jobs, more prosperity, and more inclusivity. Our thought leadership in investing, risk management, portfolio construction and trading solutions. Each company’s prospects for growth are inextricable from its ability to operate sustainably and serve its full set of stakeholders. Further, it is not just companies that face climate-related risk. In the short term, some of the work to mitigate climate risk could create more economic activity. https://www.blackrock.com/corporate/about-us/sustainability-resilience-research. Traders; GlobalTrading; IntelAlley; Trending; Featured; Sectors . We face a great challenge ahead. Please refer to the Financial Conduct Authority website for a list of authorised activities conducted by BlackRock. Despite the darkness of the past 12 months, there have been signs of hope, including companies that have worked to serve their stakeholders with courage and conviction. But just the opposite took place, and the reallocation of capital accelerated even faster than I anticipated. I cannot recall a time where it has been more important for companies to respond to the needs of their stakeholders. It’s important to recognize that net zero demands a transformation of the entire economy. Laurence D. Fink is Founder, Chairman and Chief Executive Officer of BlackRock. BlackRock is a fiduciary to our clients, helping them invest for long-term goals. Change location . This data should extend beyond climate to questions around how each company serves its full set of stakeholders, such as the diversity of its workforce, the sustainability of its supply chain, or how well it protects its customers’ data. Investors are increasingly reckoning with these questions and recognizing that climate risk is investment risk. If we want these disclosures to be truly effective – if we want to see true societal change – they should be embraced by large private companies as well. While issues of race and ethnicity vary greatly across the world, we expect companies in all countries to have a talent strategy that allows them to draw on the fullest set of talent possible. 02020394. In January of last year, I wrote that climate risk is investment risk. 2020 QDI Summary Feb 24, 2021. Summary of the 2020 Letter to CEOs (1/2) Larry Fink’s 2020 Letter to CEOs has a very clear focus this year: climate change. Der Brief des Jahres 2020 stellte den Klimawandel in den Mittelpunkt. Despite recent rapid advances, the technology does not yet exist to cost-effectively replace many of today’s essential uses of hydrocarbons. For example, we believe that issuers of public debt also should be disclosing how they are addressing climate-related risks. While the 2021 letters indicate further progression and several steps in the right direction for the financial giant, without strong policies and clarification, BlackRock still falls short of the visionary financial leadership that is needed to meet the scale and urgency of the climate crisis. Larry Fink is Founder, Chairman and CEO of BlackRock, Inc. They are demonstrating the power of companies – the power of capitalism – to respond to human needs. It belongs to people in dozens of countries trying to finance long-term goals like retirement. As an asset manager, BlackRock invests on behalf of others, and I am writing to you as an advisor and fiduciary to these clients. Our thought leadership in investing, risk management, portfolio construction and trading solutions. Under any scenario, the energy transition will still take decades. Over the course of 2020, we have seen how purposeful companies, with better environmental, social, and governance (ESG) profiles, have outperformed their peers. They are asking managers like BlackRock to accelerate our data and analysis capabilities in this area – and we are committed to meeting their needs. They need more purpose, and … 3 Source: BlackRock. Tel: + 44 (0)20 7743 3000. But it is misguided to draw such stark lines between these categories. For example, climate change is already having a disproportionate impact on low-income communities around the world – is that an E or an S issue? © 2021 BlackRock, Inc. All Rights Reserved. For evaluating and reporting climate-related risks, as well as the related governance issues that are essential to managing them, the TCFD provides a valuable framework. we sent today to our clients. Larry Fink’s 2020 letter to CEOs prompts corporate boards across industry sectors to make climate change part of their risk oversight responsibilities. But companies that are not quickly preparing themselves will see their businesses and valuations suffer, as these same stakeholders lose confidence that those companies can adapt their business models to the dramatic changes that are coming. They are also increasingly focused on the significant economic opportunity that the transition will create, as well as how to execute it in a just and fair manner. Last year BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies. Larry Fink did not mention climate change once in his 2019 letter to CEOs. Given how central the energy transition will be to every company’s growth prospects, we are asking companies to disclose a plan for how their business model will be compatible with a net zero economy – that is, one where global warming is limited to well below 2ºC, consistent with a global aspiration of net zero greenhouse gas emissions by 2050. And with the impact of sustainability on investment returns increasing, we believe that sustainable investing is the strongest foundation for client portfolios going forward. Learn how we’re helping clients navigate this transformation. In South Korea, this is issued by BlackRock Investment Management (Korea) Limited. We hold ourselves to this same standard. While no framework is perfect, BlackRock believes that the Sustainability Accounting Standards Board (SASB) provides a clear set of standards for reporting sustainability information across a wide range of issues, from labor practices to data privacy to business ethics. (While the world moves towards a single standard, BlackRock continues to endorse TCFD- and SASB-aligned reporting.) This is a set of 32 globally-representative, widely analyzed sustainable indices and their non-sustainable counterparts. We will use these disclosures and our engagements to ascertain whether companies are properly managing and overseeing these risks within their business and adequately planning for the future. Echoing sentiments from 2020, this year’s letter is an urgent message to address climate change, social justice, and data disclosure. But over the past year, we experienced something even more far-reaching – a pandemic that has enveloped the entire globe and changed it permanently. 100, Songren Rd., Xinyi Dist., Taipei City 110, Taiwan. We know that climate risk is investment risk. The events at the U.S. Capitol are a stark reminder of how vulnerable and how precious a democratic system can be. Of course, investors cannot prepare their portfolios for this transition unless they understand how each and every company is prepared both for the physical threats of climate change and the global economy’s transition to net zero. © 2021 BlackRock, Inc. All Rights Reserved. It has reminded us how the biggest crises, whether medical or environmental, demand a global and ambitious response. Companies, investors, and governments must prepare for a significant reallocation of capital. Disclosure should be a means to achieving a more sustainable and inclusive capitalism. The vaccine is a first step. The world is still in crisis and will be for some time. No company can easily plan over thirty years, but we believe all companies – including BlackRock – must begin to address the transition to net zero today. What matters is less the category we place these questions in, but the information we have to understand them and how they interact with each other. Reliance upon information in this material is at the sole discretion of the reader. Even if only a fraction of the projected impacts is realized, this is a much more structural, long-term crisis. Questions of racial justice, economic inequality, or community engagement are often classed as an “S” issue in ESG conversations. From January through November 2020, investors in mutual funds and ETFs invested $288 billion globally in sustainable assets, a 96% increase over the whole of 2019.1 I believe that this is the beginning of a long but rapidly accelerating transition – one that will unfold over many years and reshape asset prices of every type. It will help investors assess which companies are serving their stakeholders effectively, reshaping the flow of capital accordingly. These challenges will require creative public-private partnership to finance them, as well as better disclosures to attract capital. A pharmaceutical company that hikes prices ruthlessly, a mining company that shortchanges safety, a bank that fails to respect its clients – these companies may maximize returns in the short term. Larry Fink, the chief executive officer of BlackRock, wrote that 2020 served as a reminder that the world needed to take climate change more seriously. Then the pandemic took hold – and in March, the conventional wisdom was the crisis would divert attention from climate. Larry Fink’s Chairman's Letter to Shareholders Sunday, March 29, 2020 When I originally sat down to write this letter, I was in my office, thinking about how to describe the events of 2019 and what BlackRock achieved last year. This post is based on Mr. Fink’s annual letter to CEOs. The trust our clients place in us, and our role as the link between our clients and the companies they invest in, gives us a great responsibility to advocate on their behalf. We are greatly encouraged by the progress we have seen over the past year – a 363% increase in SASB disclosures and more than 1,700 organizations expressing support for the TCFD. TCFD reports are the global standard for helping investors understand the most material climate-related risks that companies face, and how companies are managing them. Today we are on the cusp of another transformation. Registered in England and Wales No. They include: publishing a temperature alignment metric for our public equity and bond funds, where sufficient data is available; incorporating climate considerations into our capital markets assumptions; implementing a “heightened-scrutiny model” in our active portfolios as a framework for managing holdings that pose significant climate risk (including flagging holdings for potential exit); launching investment products with explicit temperature alignment goals, including products aligned to a net zero pathway; and using stewardship to ensure that the companies our clients are invested in are both mitigating climate risk and considering the opportunities presented by the net zero transition. Most of the money we manage is for retirement—for individuals and pension beneficiaries like teachers, firefighters, doctors, businesspeople, and many others. There is no company whose business model won’t be profoundly affected by the transition to a net zero economy – one that emits no more carbon dioxide than it removes from the atmosphere by 2050, the scientifically-established threshold necessary to keep global warming well below 2ºC. In the discussions BlackRock has with clients around the world, more and more of them are looking to reallocate their capital into sustainable strategies. Justice, Equity, Diversity and Inclusion. now reading: On Larry Fink's 2020 Letter to CEOs. In the past year, people have seen the mounting physical toll of climate change in fires, droughts, flooding and hurricanes. Several months into the year, the pandemic collided with a wave of historic protests for racial justice in the United States and around the world. We are at a moment of tremendous economic pain. The global transition to a net zero economy is accelerating, with dramatic implications for investors. Our investment conviction is that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors. Larry Fink publishes a letter every year addressed to the CEOs of the companies BlackRock invests in. The need is particularly urgent for cities, because the many components of municipal infrastructure – from roads to sewers to transit – have been built for tolerances and weather conditions that do not align with the new climate reality. 94% of the sustainable indexes referenced above outperformed their parent benchmarks during COVID-19 crisis Q1 2020.https://www.blackrock.com/corporate/about-us/sustainability-resilience-research. In addition, I believe TCFD should not just be adopted by public companies. Tel: + 44 (0)20 7743 3000. Improved data and disclosures will help us better understand the deep interdependence between environmental and social issues. This is why I write to you each year, seeking to highlight issues that are pivotal to creating durable value – issues such as capital management, long-term strategy, purpose, and climate change. Yet we are facing the ultimate long-term problem. Fink is specific about the risks that the climate crisis presents to capital flows, with specific examples of how this may alter the global financial landscape. 2 January 2021. I am an optimist. A company that does not seek to benefit from the full spectrum of human talent is weaker for it – less likely to hire the best talent, less likely to reflect the needs of its customers and the communities where it operates, and less likely to outperform. Indeed, climate change is almost invariably the top issue that clients around the world raise with BlackRock. Read how we progressed against these commitments. But the creation of sustainable index investments has enabled a massive acceleration of capital towards companies better prepared to address climate risk. They are seeking to understand both the physical risks associated with climate change as well as the ways that climate policy will impact prices, costs, and demand across the entire economy. Change location . Estimated values from S&P/Trucost temperature alignment ranges. This month in the U.S., we saw political alienation – fueled by lies and political opportunism – erupt into violence. Trade Register No. In January 2020, BlackRock outlined our conviction that sustainability risk is investment risk. Read Larry Fink's 2021 letter to CEOs Read Larry Fink's 2021 letter to CEOs. The money we manage is not our own. For information or educational purposes only, not for reuse, redistribution, or any commercial activity, and does not constitute investment advice or an offer or solicitation to purchase or sells in any securities or any investment strategies. Today that seems a distant reality. I have great confidence in the ability of businesses to help move us out of this crisis and build a more inclusive capitalism. This ESG index was selected for its industry-neutral construction and global exposure. 2020 Distribution Summary Information Mar 2, 2021. This is why last year, we asked all companies to report in alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and the Sustainability Accounting Standards Board (SASB), which covers a broader set of material sustainability factors. In Latin America: No securities regulator has confirmed the accuracy of any information contained herein. Closed-end funds, funds of funds excluded; Money Market funds included. 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2012. While some industries, particularly those that depend on people congregating in person, have suffered, others have flourished. Address: 28F., No. Every government, company, and shareholder must confront climate change. BlackRock has been engaging with companies for several years on their progress towards TCFD- and SASB-aligned reporting. As a fiduciary, our responsibility is to help clients navigate this transition. The companies that embrace this challenge – that seek to build long-term value for their stakeholders – will help deliver long-term returns to shareholders and build a brighter and more prosperous future for the world. 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2012. Most of the money we manage is for retirement – for individuals and pension beneficiaries like teachers, firefighters, doctors, businesspeople, and many others. Vulnerable communities and developing nations, many of them already exposed to the worst physical impacts of climate change, can least afford the economic shocks of a poorly implemented transition. From 1 January 2021, in the event the United Kingdom and the European Union do not enter into an arrangement which permits United Kingdom firms to offer and provide financial services into the European Economic Area, the issuer of this material is: (i) BlackRock Investment Management (UK) Limited for all outside of the European Economic Area; and (ii) BlackRock (Netherlands) B.V. for in the European Economic Area, BlackRock (Netherlands) B.V. is authorised and regulated by the Netherlands Authority for the Financial Markets. Larry Fink, the Chairman and CEO of BlackRock, yesterday sent his annual letter to CEOs – A Fundamental Reshaping of Finance – focused on sustainability and climate change. Companies ignore stakeholders at their peril – companies that do not earn this trust will find it harder and harder to attract customers and talent, especially as young people increasingly expect companies to reflect their values. But the story goes deeper. It has both exacted a horrific human toll and transformed the way we live – the way we work, learn, access medicine, and much more. Sustainability-integrated portfolios can provide better risk-adjusted returns to investors. In a letter to our clients today, BlackRock announced a number of initiatives to place sustainability at the center of our investment approach, including: making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels; and strengthening our commitment to sustainability and transparency in our investment stewardship activities. Because better sustainability disclosures are in companies’ as well as investors’ own interests, I urge companies to move quickly to issue them rather than waiting for regulators to impose them. As you issue sustainability reports, we ask that your disclosures on talent strategy fully reflect your long-term plans to improve diversity, equity, and inclusion, as appropriate by region. Registered in England and Wales No. But companies that are not quickly preparing themselves will see their businesses and valuations suffer, as these same stakeholders lose confidence that those companies can adapt their business models to the dramatic changes that are coming. They ask us about it nearly every day. In 2020, the EU, China, Japan, and South Korea all made historic commitments to achieve net zero emissions. 2017 | 2016 | 2015 | 2014 | 2012 Oregon, investors, including BlackRock – to to! His 2019 letter to CEOs originally appeared as a global investment manager and fiduciary to clients... 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