- Climate Week in New York featured a wide range of events involving companies, investors, philanthropists, and activists (and is probably the reason you now know who Greta Thunberg is). Hence, ESG investing was top of mind at numerous events over the week – in one that stood out to us, Brian Deese, Global Head of Sustainable Investment at
, shared his thoughts on his company’s positioning for climate change and ESG strategies at an event put on by the Institute for Policy Integrity, entitled
Paying For It: Estimating and Responding to the Costs of Climate Inaction
. BlackRock’s sustainable investment team’s report called
Getting physical: assessing climate risks
can be found
Deese suggested that risks already exist in the market today, and investors can project scenarios forward to predict future risk. Interestingly, and what may be in contrast to other investors’ approaches,
when developing ESG strategies, BlackRock looks to be industry neutral and identify relative underperformers and outperformers in each industry, instead of excluding specific industries
. BlackRock has 59 new sustainable products, which are fastest growing in Europe, including a recently launched low carbon index fund. With the introduction of these new funds and an increased focus on ESG, the company plans to engage more with issuers on how to mitigate risk and drive changes. If you’re planning on talking to Blackrock during engagement season – the report and presentation are good preparation.
- Banks took center stage in Climate Week this year, with an organization of the largest banks publicly
to a set of Principles for Responsible Banking. These Principles aren’t deeply prescriptive to banks’ day-to-day business, mostly focusing on suggesting a set of
that each company can pursue. However, it again brings to mind a conversation we’ve had in this space from many different angles that has parallels to the impact investment / green bond movement. There are likely small-scale investment opportunities with an environmental or social benefit inside your organization, and
each of the bank signatories that have stated targets will be looking for ways to commit capital to help meet them
. Identifying these projects and seeking discrete funding for them might have benefits not only for your business and the stakeholders you face as an IRO, but now also for the banks financing them.