Blackrock Rainmaker Wants Wants Climate Cash for Emerging Markets

(Bloomberg) -- Investors need to channel massive new volumes of capital into emerging markets over the coming decades in order to mitigate the droughts, famines and mass migrations that could be triggered by unchecked global warming, according to Philipp Hildebrand, the vice chairman of BlackRock Inc.

Industrialized nations should be coordinating with private investors in order to lower climate risks in developing economies, Hildebrand said Thursday at an Austrian National Bank meeting on climate change in Vienna. He issued the challenge as rich countries continue to bicker over climate finance ahead of a key international meeting next month. 

“We have to reimagine how we deploy climate finance in emerging markets,” Hildebrand said. “We need a 10-fold increase in capital into the emerging world” because “climate risks facing emerging markets will not be contained to those countries,” he said. 

BlackRock, the world’s largest asset manager with $9.5 trillion in client money, is expanding its reach in environmentally sustainable investments. The firm is already the biggest provider of ESG exchange-traded funds as investors increasingly look for cheaper, passive strategies within sustainability. Over the last year, it’s doubled sustainable investments under management to about $400 billion, Hildebrand said. 

Hildebrand said the global economy is in the midst of its greatest structural since the advent of the internal combustion engine, with settled science over climate change compelling governments to implement environmentally-friendly reforms. He figures that to reach net zero, the world needs the equivalent of 10 Marshall Plans a year over the next three decades, a reference to the post-World War II recovery act that cost the equivalent of about $130 billion in today’s money. 

“It is in fact only the beginning to one of the greatest structural changes the world has ever undergone,” according to the executive. “It means that investments that looked safe in the past could be existentially risky in the future.”

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