Of course, but why? What does that mean to us?
This is good insight from a formidable investment group who has targeted putting dollars in the emerging technologies for many years now. It mean if we are business owners and part of a supply chain, we need to adapt, streamline and embrace smart tech. Our emphasis has to shift around what is truly a good looking P & L and balance sheet.
We believe other staples of our global system are dying as well. Whether it is in energy systems, transportation changes around autos, television and entertainment and, certainly, how we govern and lead, we are seeing the end of an era that is quickly being replaced with innovation and imagination.
During a recent interview,
Jim Barry, a managing director of BlackRock and global head of the
investment firm’s Infrastructure and Investment Group, recently declared
that “coal is dead.” While he acknowledged that coal will still be part
of many countries’ energy portfolios, Barry said any investor who is
seeking returns from coal beyond 10 years from now is “gambling very
The New York-based investment firm, which
describes itself as the world’s largest investment managers based on the
$5.1 trillion in assets under its wing, has been bullish about renewables and other clean technology developments for several years.
largely due to the cheap cost of renewables, Barry and BlackRock are
sanguine about these technologies’ future. Barry was also optimistic
during the interview on the outlook for electric cars, due to their
improved range and the declining cost of battery storage. While talk of
“peak oil” has been underway for years, Barry views the oil markets
through a different lens, insisting that “peak demand,” not just supply,
is a dynamic that investors should not ignore. As consumers embrace
electric vehicles, the demand for oil will continue to decline – with
the end result a cloudy future for conventional energy companies with
large oil reserves on their books.
On the investment front,
BlackRock has certainly put its money where its mouth is. The company
has managed its own clean energy index fund since 2008, although that
fund has largely struggled: the Global Clean Energy ETF
had a banner year in 2013, but was flat for the next two years, and its
price fell another 16 percent last year. Another one of its funds, the BGF New Energy Fund,
has been on an upward trajectory over the course of this decade.
BlackRock has also directly invested in clean power projects, as in the purchase two years ago of a 50 percent stake of a 200MW wind power installation in Texas.
Meanwhile, BlackRock has long advised investors
that they can no longer ignore the risks that climate change and water
scarcity may impose on their portfolios, and has insisted they strive to
become more efficient when it comes to resource consumption. “Companies
that generate more sales with less carbon, water and waste are
deploying resources more efficiently,” wrote the co-authors of a report
on climate change impacts last year.
In recent years, the company has suggested strategies
for financial institutions on how they can develop tactics to push the
companies in which they invest to become more socially responsible.
BlackRock has also challenged conventional wisdom about corporate
governance issues across its global offices: earlier this year, it warned companies
in the United Kingdom to link executive pay to performance, or
otherwise they could put themselves at risk of shareholder revolts.
BlackRock is increasingly warning investors about climate change risk,
it is hardly perfect – which, in fairness, is a criticism that can
apply to plenty of companies and individual investors. Shortly after the
release of its latest climate change advisory in September 2016, Greenpeace accused
the company of having investments totaling at least $1.5 billion in
various fossil fuel companies across China. Coal may be close to dead,
but it still has its foothold on the world’s energy supply – and for
many people and companies alike, divestment is often easier said than