“No issue ranks higher than climate change”
BlackRock’s CEO and Chairman, Larry Fink’s, 2021 letter to CEOs once again places climate change at the heart of its message. He urges business leaders to seize the opportunities of the transition to net zero or risk facing the consequences.
“As the transition accelerates, companies with a well-articulated long-term strategy, and a clear plan to address the transition to net zero, will distinguish themselves with their stakeholders – with customers, policymakers, employees and shareholders – by inspiring confidence that they can navigate this global transformation. 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”.
He confirms that BlackRock is doubling down on climate risk as an indicator for investor decision making. Last year, the firm voted against 69 companies and against 64 directors for climate-related reasons, while putting 191 companies “on watch.”
‘Purposeful companies, with better (ESG) profiles, have outperformed their peers by 81%’
The story runs deeper than just investing in companies that are addressing their climate risk – doing so is smart investing. Fink highlights how ‘purposeful companies, with better environmental, social and governance (ESG) profiles, have outperformed their peers by 81%’. This difference was even more pronounced during the turmoil of covid-19 and showcases ‘another instance of sustainable funds’ resilience’.
At Carbon Intelligence, we advise our customers that a credible net zero target requires a science-based approach. We are the UK leading consultancy science-based targets having worked with 1 in 3 UK companies who have had their targets independently approved by the Science-Based Target initiative. Contact us to start your journey.