Mirjam Staub-Bisang

In your work, you focus on sustainable investing. How do you think the crisis has changed the way we look at environmental issues?

Coronavirus has raised awareness of sustainability issues and shown how fragile our world is. Unlike the pandemic, which caught us off guard, the climate crisis is not unexpected. However, we turned a blind eye for a long time. In the meantime, people have become aware that climate change is a threat to our livelihoods and that we need to act boldly and fundamentally change our behavior to achieve net zero by 2050. Tackling climate change is not a sprint, it’s a marathon. And we need the efforts of each and every one.

Do you sense this heightened awareness of sustainability within BlackRock as well?

Absolutely. We observe high demand for sustainable investments. And they’re increasingly coming into focus, off course also because they are performing well. This trend accelerated during the pandemic. As a result, we achieved the performance results of the full year 2020 with our sustainability products as early as the first half of 2021.At BlackRock, we talk about a tectonic shift toward sustainable investing. Furthermore, I think there is an increasing focus around sustainability and increased attention on societal issues like the environment and biodiversity, which have also been strengthened by Covid.As it happens, we broadly communicated our investment beliefs almost at the same time that coronavirus first broke out. For us, we outlined our conviction that sustainability risk especially climate risk – is investment risk. As a result, sustainability has become our investment standard. Since then, we have stringently implemented this strategy.

The summit in Glasgow between October and November 2021 was already the 26th UN climate conference. Hand on heart: do events like this still make any real difference?

Of course. At COP26, participating countries and the business community agreed to work together to advance climate goals on an unprecedented scale. And the financial industry is also on board. Some 450 international financial institutions – banks, insurance companies and pension funds with assets under management of over USD 130 trillion – have pledged to support the fight against climate change and the achievement of net zero targets by 2050. That’s a significant amount of capital and an enormously important step that sends a strong signal.

How can investors ensure that a company they are investing in doesn’t achieve its ESG goals simply by selling any dirty business?

This is a good question and one that investors around the world are currently asking themselves: do they want a portfolio with as small a carbon footprint as possible, or should they stand by companies as they make the transition to net zero operations? Of course, it doesn’t make sense for energy companies to simply sell their CO2-intensive assets, for example, which then continue to be operated but in less responsible hands. Although this would make the balance sheet less CO2-heavy, those emissions have not been eliminated. I think this is where investors need to work with the companies to find a sensible exit. Pulling capital out of entire industries or shifting the financing of CO2-intensive assets from public to private markets is hardly conducive to achieving a net zero economy. In many of these industries, there are forward-thinking companies that are transforming their business accordingly and making an important contribution to decarbonizing the economy.

Where do you see potential threats and risks in the shift to a sustainable economy?

With every radical change, there are winners and losers. That’s why it is so important to involve the broader society, as far as possible, in this endeavor. I’m thinking, for example, of employees of companies currently operating in CO2-intensive sectors. We need to support these people on their way to a green future – through just change and an outstretched hand. In this way, we can prevent the affected individuals from falling by the wayside and divisions in society growing wider. But above all, I would like to emphasize that the transformation to a climate-neutral economy is first and foremost a great opportunity. I’ve been working in the field of sustainable investments for more than ten years now. After a long period where little was happening, I’ve recently noticed an incredible momentum. Sometimes I feel like we’re on an express train that can no longer be stopped. That’s why I’m hopeful about achieving the goal of net zero emissions by 2050 or sooner. Thankfully! If all of us – companies, investors, asset managers or private individuals – work together, we can do it and leave behind a healthy, liveable world for future generations.