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Climate change impacts to drive investment returns: BlackRock

By Neil Griffiths
 — 1 minute read

The COVID-19 pandemic has created an increased focus on climate change and sustainability, according to global asset manager BlackRock.

In its latest weekly market commentary, “What lies beyond the restart?”, the BlackRock Investment Institute (BII) noted the pandemic as a key investment implication moving forward.

BII said the pandemic “has added fuel to pre-existing structural trends such as an increased focus on sustainability” and “has focused attention on underappreciated sustainability-related factors and supply chain resilience”.

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“Strategically we see returns being driven by climate change impacts, and view developed market equities as an asset class positioned to capture the opportunities from the climate transition,” the commentary read.

BII added that China is “key” to transitioning to a net-zero economy, due to it being the world’s largest greenhouse gas emitter and its pledge to achieve carbon neutrality before 2060 and peak carbon emissions by 2030.

“The net-zero transition requires huge investments, changes in business models and innovation,” BII said.

“There is no roadmap for such a tectonic shift – one that we believe markets are underappreciating.

“The transition could create sustained demand for commodities such as copper and lithium that are critical for electrification, but may also exacerbate a near-term supply/demand imbalance in oil, spurring price volatility.”

 

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Climate change impacts to drive investment returns: BlackRock
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