Post by account_disabled on Mar 3, 2024 20:30:38 GMT -10
New sources of capital fueling market disruption
Over the past four decades, we have seen an explosion in the availability of capital. Today, global financial assets total $400 trillion.2 This exponential growth brings risks and opportunities for investors and businesses alike, and means that banks alone are no longer the gatekeepers of finance.
Young, innovative companies have never had easier access to capital. There has never been more money available to make new ideas a reality. This is fueling a dynamic innovation landscape. It means that virtually every sector has a large number of disruptive startups trying to topple the market leaders. CEOs of established companies must understand this changing landscape and the diversity of capital available if they want to remain competitive against smaller, more agile companies.
Letter from Larry Fink 2022 capital
BlackRock wants the companies we invest Chile Mobile Number List in for our clients to evolve and grow so that they generate attractive returns for decades to come. As long-term investors, we are committed to working with companies across all industries. But we must also be agile and ensure that our clients' assets are invested, in line with their objectives, in the most dynamic companies, whether new or established, with the best chance of success over time. As capitalists and managers, that is our job.
I believe in capitalism's ability to help people achieve better futures, drive innovation, build resilient economies, and solve some of our toughest challenges. Capital markets have allowed companies and countries to flourish. But access to capital is not a right. It is a privilege. And the duty to attract that capital in a responsible and sustainable way is yours.
Capitalism and sustainability
Most stakeholders, from shareholders to employees, customers, communities and regulators, now expect companies to play a role in decarbonizing the global economy. Few things will affect capital allocation decisions, and therefore the long-term value of your company, more than how effectively you navigate the global energy transition in the years ahead.
It's been two years since I wrote that climate risk is investment risk. And in that short period, we have seen a tectonic shift of capital.3 Sustainable investments have now reached $4 trillion.4 Actions and ambitions towards decarbonization have also increased. This is just the beginning: the tectonic shift towards sustainable investing is still accelerating. Whether capital is being deployed into startups focused on energy innovation or capital is being shifted from traditional indices to more tailored portfolios and products, we will see more money moving.
Every business and every industry will be transformed by the transition to a net-zero emissions world. The question is, will you lead or be led?
In just a few short years, we've all seen innovators reinvent the automotive industry. And today, all automakers are racing toward an electric future. The automotive industry, however, is simply ahead of the curve: all sectors will be transformed by new, sustainable technology.
Engineers and scientists work around the clock to decarbonize cement, steel and plastics; maritime transport, road transport and aviation; agriculture, energy and construction. I believe the decarbonization of the global economy will create the biggest investment opportunity of our lifetime. It will also leave companies that don't adapt behind, regardless of the industry they are in. And just as some companies risk being left behind, so do cities and countries that don't plan for the future. They risk losing jobs, even as other places gain them. The decarbonization of the economy will be accompanied by enormous job creation for those who commit to the necessary long-term planning.
Letter from Larry Fink 2022 decarbonization
The next 1000 unicorns won't be search engines or social media companies, they will be sustainable and scalable innovators: startups that help the world decarbonize and make the energy transition affordable for all consumers. We need to be honest about the fact that green products often have a higher cost today. Reducing this green premium will be essential for an orderly and fair transition. With unprecedented amounts of capital chasing new ideas, incumbents must be clear about their path to success in a net-zero economy. And it's not just startups that can and will disrupt industries. Bold headlines can and should do it too. In fact, many incumbents have an advantage in capital, market knowledge and technical expertise on the global scale needed for the coming disruption.
Our question to these companies is: what are they doing to disrupt your business? How are you preparing for and participating in the net zero transition? As your industry is transformed by the energy transition, will it follow the path of the dodo or be a phoenix?
We focus on sustainability not because we are environmentalists, but because we are capitalists and fiduciaries of our clients. That requires understanding how companies are adjusting their businesses to the massive changes the economy is experiencing. As part of that approach, we are asking companies to set short-, medium- and long-term goals for greenhouse gas reduction. These objectives and the quality of the plans to achieve them are fundamental to the long-term economic interests of its shareholders. That's also why we ask you to issue reports consistent with the Task Force on Climate-related Financial Disclosures (TCFD): because we believe these are essential tools for understanding a company's ability to adapt to the future.
The transition to net zero is already uneven with different parts of the global economy moving at different speeds. It's not going to happen overnight. We need to go from brown tones to green tones. For example, to ensure continuity of affordable energy supply during the transition, traditional fossil fuels such as natural gas will play an important role both for power generation and heating in certain regions and for hydrogen production.
The pace of change will be very different in developing and developed countries. But all markets will require unprecedented investment in decarbonization technology. We need transformative discoveries at the light bulb level, and we need to encourage investment in them to make them scalable and affordable.
As we pursue these ambitious goals, which will take time, governments and businesses must ensure that people continue to have access to reliable and affordable energy sources. This is the only way we will create a green economy that is fair and just and avoid social discord. And any plan that focuses solely on limiting supply and does not address demand for hydrocarbons will drive up energy prices for those who can least afford it, resulting in further polarization over climate change and the erosion of progress.
Divesting from entire sectors, or simply moving carbon-intensive assets from public to private markets, will not get the world to net zero. And BlackRock does not pursue divestment from oil and gas companies as a matter of policy. We have some clients who choose to sell their assets, while other clients reject that approach. Forward-thinking companies across a wide range of carbon-intensive sectors are transforming their businesses and their actions are a critical part of decarbonisation. We believe that the companies leading the transition present a vital investment opportunity for our clients and that driving capital into these phoenixes will be essential to achieving a net-zero emissions world.
Capitalism has the power to shape society and act as a powerful catalyst for change . But companies can't do this alone and they can't be the climate police. That will not be a good outcome for society. We need governments to provide clear pathways and a coherent taxonomy for sustainability policy, regulation and disclosure across markets. They must also support communities affected by the transition, help catalyze capital for emerging markets, and invest in innovation and technology that will be essential to decarbonizing the global economy.
Over the past four decades, we have seen an explosion in the availability of capital. Today, global financial assets total $400 trillion.2 This exponential growth brings risks and opportunities for investors and businesses alike, and means that banks alone are no longer the gatekeepers of finance.
Young, innovative companies have never had easier access to capital. There has never been more money available to make new ideas a reality. This is fueling a dynamic innovation landscape. It means that virtually every sector has a large number of disruptive startups trying to topple the market leaders. CEOs of established companies must understand this changing landscape and the diversity of capital available if they want to remain competitive against smaller, more agile companies.
Letter from Larry Fink 2022 capital
BlackRock wants the companies we invest Chile Mobile Number List in for our clients to evolve and grow so that they generate attractive returns for decades to come. As long-term investors, we are committed to working with companies across all industries. But we must also be agile and ensure that our clients' assets are invested, in line with their objectives, in the most dynamic companies, whether new or established, with the best chance of success over time. As capitalists and managers, that is our job.
I believe in capitalism's ability to help people achieve better futures, drive innovation, build resilient economies, and solve some of our toughest challenges. Capital markets have allowed companies and countries to flourish. But access to capital is not a right. It is a privilege. And the duty to attract that capital in a responsible and sustainable way is yours.
Capitalism and sustainability
Most stakeholders, from shareholders to employees, customers, communities and regulators, now expect companies to play a role in decarbonizing the global economy. Few things will affect capital allocation decisions, and therefore the long-term value of your company, more than how effectively you navigate the global energy transition in the years ahead.
It's been two years since I wrote that climate risk is investment risk. And in that short period, we have seen a tectonic shift of capital.3 Sustainable investments have now reached $4 trillion.4 Actions and ambitions towards decarbonization have also increased. This is just the beginning: the tectonic shift towards sustainable investing is still accelerating. Whether capital is being deployed into startups focused on energy innovation or capital is being shifted from traditional indices to more tailored portfolios and products, we will see more money moving.
Every business and every industry will be transformed by the transition to a net-zero emissions world. The question is, will you lead or be led?
In just a few short years, we've all seen innovators reinvent the automotive industry. And today, all automakers are racing toward an electric future. The automotive industry, however, is simply ahead of the curve: all sectors will be transformed by new, sustainable technology.
Engineers and scientists work around the clock to decarbonize cement, steel and plastics; maritime transport, road transport and aviation; agriculture, energy and construction. I believe the decarbonization of the global economy will create the biggest investment opportunity of our lifetime. It will also leave companies that don't adapt behind, regardless of the industry they are in. And just as some companies risk being left behind, so do cities and countries that don't plan for the future. They risk losing jobs, even as other places gain them. The decarbonization of the economy will be accompanied by enormous job creation for those who commit to the necessary long-term planning.
Letter from Larry Fink 2022 decarbonization
The next 1000 unicorns won't be search engines or social media companies, they will be sustainable and scalable innovators: startups that help the world decarbonize and make the energy transition affordable for all consumers. We need to be honest about the fact that green products often have a higher cost today. Reducing this green premium will be essential for an orderly and fair transition. With unprecedented amounts of capital chasing new ideas, incumbents must be clear about their path to success in a net-zero economy. And it's not just startups that can and will disrupt industries. Bold headlines can and should do it too. In fact, many incumbents have an advantage in capital, market knowledge and technical expertise on the global scale needed for the coming disruption.
Our question to these companies is: what are they doing to disrupt your business? How are you preparing for and participating in the net zero transition? As your industry is transformed by the energy transition, will it follow the path of the dodo or be a phoenix?
We focus on sustainability not because we are environmentalists, but because we are capitalists and fiduciaries of our clients. That requires understanding how companies are adjusting their businesses to the massive changes the economy is experiencing. As part of that approach, we are asking companies to set short-, medium- and long-term goals for greenhouse gas reduction. These objectives and the quality of the plans to achieve them are fundamental to the long-term economic interests of its shareholders. That's also why we ask you to issue reports consistent with the Task Force on Climate-related Financial Disclosures (TCFD): because we believe these are essential tools for understanding a company's ability to adapt to the future.
The transition to net zero is already uneven with different parts of the global economy moving at different speeds. It's not going to happen overnight. We need to go from brown tones to green tones. For example, to ensure continuity of affordable energy supply during the transition, traditional fossil fuels such as natural gas will play an important role both for power generation and heating in certain regions and for hydrogen production.
The pace of change will be very different in developing and developed countries. But all markets will require unprecedented investment in decarbonization technology. We need transformative discoveries at the light bulb level, and we need to encourage investment in them to make them scalable and affordable.
As we pursue these ambitious goals, which will take time, governments and businesses must ensure that people continue to have access to reliable and affordable energy sources. This is the only way we will create a green economy that is fair and just and avoid social discord. And any plan that focuses solely on limiting supply and does not address demand for hydrocarbons will drive up energy prices for those who can least afford it, resulting in further polarization over climate change and the erosion of progress.
Divesting from entire sectors, or simply moving carbon-intensive assets from public to private markets, will not get the world to net zero. And BlackRock does not pursue divestment from oil and gas companies as a matter of policy. We have some clients who choose to sell their assets, while other clients reject that approach. Forward-thinking companies across a wide range of carbon-intensive sectors are transforming their businesses and their actions are a critical part of decarbonisation. We believe that the companies leading the transition present a vital investment opportunity for our clients and that driving capital into these phoenixes will be essential to achieving a net-zero emissions world.
Capitalism has the power to shape society and act as a powerful catalyst for change . But companies can't do this alone and they can't be the climate police. That will not be a good outcome for society. We need governments to provide clear pathways and a coherent taxonomy for sustainability policy, regulation and disclosure across markets. They must also support communities affected by the transition, help catalyze capital for emerging markets, and invest in innovation and technology that will be essential to decarbonizing the global economy.