Ross Kerber and Simon Jessop

LONDON, (Reuters) – BlackRock, the world’s largest asset manager, announced Wednesday that it would increase its offerings to investors to “navigate and drive” the transition towards a net zero world. This was in a letter sent to clients, which was seen by Reuters.

BlackRock stated that decarbonisation was now a matter if and not when. The 95% countries responsible for global greenhouse gas emissions have pledged to achieve net-zero emission in the coming decades.

However, the speed of the transition is not certain. The rate of recovery from pandemic impacts will lead to a renewed focus on fossil fuels, as they are more expensive and the energy supply runs short.

Philipp Hildebrand (Vice Chairman), was among those who signed the Feb. 3 letter. Hildebrand stated that the markets are beginning to recognize the impact of the climate shift on asset prices.

BlackRock announced that it will create the BlackRock Transition Scenario in order to help investors. It shows how the transition from a fossil fuel economy is expected to affect technologies, sectors, and regions.

Trillions have already been invested in funds and products that focus on ESG investment.

BlackRock reported that in 2021 70% of the broad-market ESG indexes would outperform non-ESG counterparts with an average outperformance exceeding 100 basis points.

To help clients gain “climate-awareness” strategies, it plans to create more active and passively managed products. Additionally, it will increase its iShares strategies by including climate benchmarks and integrate climate analytics in its consulting services.

It will also create funds and strategies that allow for more people to make the transition. For example, funding sustainable energy technology, or green energy, is one way.

The letter concluded that BlackRock helped clients “navigate and drive this economic and financial revolution”.

Ben Cushing, Sierra Club Fossil Free Finance Campaign Manager said that while BlackRock deserves credit for its leadership, more difficult choices were needed to stop investment in polluting businesses.

“The accelerating climate crisis means that the gap between current progress and the action that’s needed is ever-growing,” he said.