Members of the Climate Finance Partnership, a group led by BlackRock that includes France, Germany and the Hewlett and Grantham charitable foundations, will provide the first US$100 million, which will be used as a safety net for possible losses incurred by other institutional investors for the remaining US$400 million. The fund will focus on projects in Africa, Southeast Asia and Latin America. (The Logic)
Talking point: This is the latest in a string of climate-related commitments from the world’s biggest asset manager. In his annual letter to chief executives last week, BlackRock CEO Larry Fink stressed the need to address climate change in business and investment decisions; he committed to doubling the number of ESG exchange-traded funds and dropping portfolio firms with more than a quarter of their revenues from thermal coal. Days earlier, BlackRock signed onto Climate Action 100+, a global initiative in which institutional investors pressure the biggest carbon-emitting companies to curb their environmental impact. BlackRock’s investment decisions tend to have a ripple effect in the finance community, with its stance on gun control and corporate responsibility, for example, driving industry-wide change. The concept of considering climate change in financial decisions already had momentum before BlackRock went all in on the file, but its new commitments could sway some holdouts or encourage bolder strategies.