- Private companies should face sustainability disclosures
- More investment needed to lower the “green premium”
- Calls for an overhaul of the role of global institutions
VENICE, July 11 (Reuters) – BlackRock (BLK.N) chief executive Larry Fink on Sunday called on governments to develop a stronger long-term climate finance plan to unlock the private capital needed to finance the transition to a low carbon economy.
Addressing the Venice International Climate Conference at a meeting of G20 finance ministers, he said without such a plan, current efforts, including on corporate sustainability disclosure, risked failure. ‘to be “nothing more than a facade”.
Fink, who heads the world’s largest asset manager with around $ 9 trillion in assets, also called for reform of the International Monetary Fund and the World Bank to make them better suited to meet the challenge of climate change.
Fink, highlighted three “critical” issues needed to fuel the ecological transition, which he said represent a $ 50 trillion opportunity for investors. BlackRock itself is a major investor in fossil fuels.
First, he said private companies should be under the same pressure to share information about their sustainability efforts as public companies.
Currently, listed oil and gas companies were “overwhelmingly encouraged” to sell their most polluting assets, often to private and public companies over which there is less control and which disclose much less about their operations.
Second, Fink said governments risked fueling inequalities unless they create more demand for greener products and services, lowering the cost, or “green premium,” which penalizes the poorest and could fuel social instability.
Finally, global institutions such as the World Bank and the IMF needed to be changed so that they could do more to encourage private sector capital to help finance the transition in emerging markets.
He noted that the two bodies were created almost 80 years ago on the basis of a bank balance sheet model and said there was now a need to “rethink their roles”.
Citing BlackRock’s role in creating a $ 250 million public-private climate finance strategy to help finance sustainable infrastructure, in which government and philanthropic investors provide subordinate capital to protect private investor returns , he said more was needed.
“If we don’t have international institutions offering this kind of first loss position on a larger scale than they do today, properly overseeing these investments and reducing the cost of funding and the cost of equity capital , we are simply not going to be able to attract the private capital necessary for the energy transition in emerging markets, ”he said.
Reporting by Simon Jessop in London and Gavin Jones in Venice; Editing by Christina Fincher and Hugh Lawson
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