{"id":617755,"date":"2024-03-27T00:00:00","date_gmt":"2024-03-27T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2024\/03\/27\/esg-and-climate-change-take-the-backseat-for-infrastructure-energy-pragmatism-in-finks-letter\/"},"modified":"2024-03-27T00:00:00","modified_gmt":"2024-03-27T00:00:00","slug":"esg-and-climate-change-take-the-backseat-for-infrastructure-energy-pragmatism-in-finks-letter","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2024\/03\/27\/esg-and-climate-change-take-the-backseat-for-infrastructure-energy-pragmatism-in-finks-letter\/","title":{"rendered":"ESG and climate change take the backseat for infrastructure, energy pragmatism in Fink\u2019s letter"},"content":{"rendered":"

Finance will be \u201ckey to addressing two of the mid-21st century\u2019s biggest economic <\/strong>challenges,\u201d BlackRock boss Larry Fink writes <\/strong>in his annual letter to shareholders, zeroing in on infrastructure in general (and energy infrastructure in particular) and how to pay for retirement when a growing percentage of the world\u2019s population is aging. <\/p>\n

Why it matters #1: <\/strong>Fink co-founded and leads a business that he\u2019s grown from an eight-person shop into the world\u2019s largest asset manager. His writing is cogent and he has consistently put a ton of effort into making his annual letter to shareholders into exercises in strategic thinking. He\u2019s not just his generation\u2019s Warren Buffett, in that sense \u2014 his notes are now scrutinized at least as carefully as the Oracle of Omaha\u2019s were back at the height of his influence. <\/p>\n

Why it matters #2: <\/strong>Fink\u2019s past letters made climate change and \u201cstakeholder capitalism\u201d (as it is now trendy to call ESG investing) mainstream topics on Planet Finance. <\/p>\n

What\u2019s in it for folks who live, do business, or invest in our part of the world? <\/strong>The infrastructure piece, right now. And the retirement issue, too \u2014 if we\u2019re smart. (More on the retirement bit in another Planet Finance column to come.)<\/p>\n

On infrastructure: <\/strong>Fink argues that \u201cas countries decarbonize and digitize their economies, they\u2019re supercharging demand for all sorts of infrastructure, from telecom networks to new ways to generate power. In fact, in my nearly 50 years in finance, I\u2019ve never seen more demand for energy infrastructure.\u201d<\/p>\n

Citing trips to nearly 20 countries worldwide, he writes that countries \u201chave twin aims: <\/strong>They want to transition to lower-carbon sources of power while also achieving energy security.\u201d<\/p>\n

His solution will sound awfully familiar if you live in Egypt, Saudi Arabia, or the UAE: <\/strong>\u201cThe future of infrastructure is public-private partnership,\u201d he writes, and the adoption of an \u201cenergy pragmatism\u201d<\/strong> approach \u2014 embrace renewables, yes, but don\u2019t abandon the fossil fuels we need to cool our homes and grow our economies until the moment is right. <\/p>\n

BlackRock is a big investor in both renewable energy and hydrocarbon companies<\/strong>, and Fink knows that pragmatism will expose him to arrows from both sides. His argument that energy pragmatism is the real \u201cpath to decarbonization\u201d will ring true to Saudi ears \u2014 and to folks in Germany and Texas, which he cites as examples of the policy in action. <\/p>\n

Putting his money where his mouth is: <\/strong>BlackRock said in January that it was going after the USD 1 tn infrastructure market by acquiring Global Infrastructure Partners to create a \u201cworld-leading infrastructure private markets investment platform.\u201d<\/p>\n

Read for yourself: <\/strong>Fink\u2019s letter is online here<\/a>. <\/p>\n

Read what others are saying: <\/strong>Financial Times<\/a> | Wall Street Journal<\/a> | New York Times<\/a> | Business Insider<\/a> <\/p>\n

ALSO WORTH NOTING-<\/strong><\/p>\n