BlackRock, the biggest asset manager globally, will create a unit named Transition Capital to invest in opportunities linked to the low-carbon economy. The news comes from an internal memo seen by Reuters.
The New York-based company, which manages approximately $8 trillion in assets, would work with its capital markets team and portfolio managers to identify and support “proprietary transition-focused opportunities.”
“Our dialogue with clients, CEOs of established and startup companies, and government leaders tells us that they are all looking for even more ways to work directly with BlackRock,” the memo said. The goal of the asset manager is to become the “clear global leader” in the transition to a low-carbon economy, the memo also said.
The new unit comes in the context of increasing government and corporate efforts to switch to a low-carbon economy and less than two weeks before the 2022 United Nations Climate Change Conference.
When it comes to climate policy, BlackRock has faced pressure from both sides, with conservatives saying the company is essentially boycotting fossil fuels and green campaigners criticizing them for not cutting back finance to heavy emitters.
The company remains a major investor in the oil and gas industry. Yet, its Chairman and CEO Larry Fink is well-known for his annual letters to CEOs that stress the importance of corporate responsibility on topics such as climate action.
Transition Capital will become part of BlackRock Alternatives and will be led by Dickon Pinner, previously a senior partner at McKinsey who advised on transition. According to the memo, Pinner also has experience with clean technology and the oil and gas sector as a reservoir engineer.