‘We Have to Change Capitalism’ to Beat Climate Change, Says Blackrock Vice-Chair

Top brass at the world’s largest asset manager says the rules governing investments are evolving to factor in environmental risks.

Capitalism must change to avert climate change, according to the vice-chair of the world’s largest asset manager, Blackrock.

Two weeks ago, Blackrock boss Larry Fink shook the corporate world with a letter demanding social responsibility in return for the support of his company, which manages around $6 trillion in assets.

On Wednesday, at the annual World Economic Forum in Davos, vice-chair Philipp Hildebrand expanded on that theme.

Fiduciary duty – asset managers’ legal responsibility to make clients the best return on their money – is often deployed as a reason not to consider how investments might impact the climate.  But that concept was “evolving”, said Hildebrand.

He called on academics to look more deeply at the issue.  The European Commission recently launched a public consultation seeking for contributions from the financial world.

“We will hopefully demonstrate that at a minimum there is not a negative trade-off and there may even be better performance,” said Hildebrand.

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