Green transition, Fink (BlackRock): “Never seen such a thing in 40 years”

“Global sustainable investment strategies have seen inflows of nearly $ 400 billion in 2020 and are on track to grow almost double this year. I believe it is the beginning of deeper transformation of the financial system that I have seen in my 40-year career in finance ». It is one of the key passages of Larry Fink, BlackRock president and CEO, during the international climate conference in Venice. Despite the long experience, the number one of the largest managed savings group in the world ($ 9.1 trillion under management) declares his amazement at the enormous changes in the financial sector caused by climate change and the necessary green transition.

And despite predicting this revolution two years ago, he confesses to being surprised by the speed: “It’s happening at a faster pace than I ever imagined.” According to BlackRock analysts, Fink recalls, “the transition could bring up to 25% more cumulative GDP growth over the next two decades. It represents an investment opportunity of at least 50 trillion dollars ».

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Listed companies and banks “guarding” emissions

The goal is to reach “zero emissions” of CO2 in 2050 to contain the increase in global warming below the threshold of 1.5 degrees as foreseen by the Treaty of Paris in 2015. Fink, in his Venice speech, highlights the main obstacles on this path. “The change is happening above all in the financial markets and among listed companies,” he stresses. But this is not enough: it is also necessary to involve non-listed companies and especially those that are part of the supply chain of the largest companies.

«Tcfd (the international task force on climate-related financial risks), of course, it requires listed companies not only to disclose their direct emissions – says Fink -, but also the emissions of the entire supply chain of a company or the loan portfolio of a bank ». Here is the point. The technicians define it Scope 3: are the indirect emissions due to the company’s activity; emission sources that are not under direct control but whose emissions are indirectly due to company activity.

So what should large listed companies and banks do “to reduce these Scope 3 emissions,” asks the CEO and president of BlackRock? The answer given by Fink is very clear: “The large listed companies and banks are called upon to play the role of”emissions police“, Having to cut business and loans to companies, often small, which have not reduced their emissions”. The top manager is aware of the effects of these decisions: «This will have the undesirable consequences of fueling a backlash against our large companies. It will promote the narrative of the big versus the small and further polarization. “

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