BlackRock CEO Larry Fink addressed the Middle East Green Initiative Summit in Saudi Arabia on Monday and claimed that the next wave of billion dollar startup companies will be in climate tech, not search engines, social media or other hot sectors.
Fink reiterated his stance that protecting the planet and seeing climate change as a “business occasion” are two of the most important things right now in finance. He also said that reaching net-zero emissions by 2050 will lead to a “revolution in the production of everything we produce and consume.”
“Investments in low carbon projects in emerging markets will need to be more than a trillion dollars a year — more than six times the current rate of investments of about $150 billion a year,,” Fink said.
Echoing this sentiment BlackRock established a $600 million fund for investment in green technologies, together with Singapore investment company Temasek in April this year.
Fink also shared that he sees demand from investors to put their money in climate tech.
“As an asset manager at the nexus between owners of capital and companies and assets we invest in on behalf of them, we see this playing out every day,” Fink said. “Asset owners are looking for investment opportunities that will come from this historic transition to net zero.”
Fink also talked about the higher cost of technologies like carbon capture and hydrogen.
“The price differences is sometimes described as a green premium. For example, sustainable aviation fuel costs at least 140% more than kerosene,” Fink said.
To mitigate this he thinks that the International Monetary Fund and the World Bank “must play a critical role” in helping provide capital both in developed and developing countries.
The event in Saudi Arabia provided another interesting announcement – Saudi Arabia have taken a shine to carbon capture and will be launching a multi-billion dollar fund to invest in the industry’s development in the region.