American investment management corporation, BlackRock Inc., has reportedly raised over $673 million for a climate-oriented infrastructure fund, with backing from the Japanese, German and French governments. The funding will go towards investing in climate-focused projects in the emerging markets.
Dubbing the fund as Climate Finance Partnership, Blackrock CEO, Larry Fink stated that the company hopes that the fund will set an example of how mobilizing private capital in developing countries can help in dealing with climate change.
While speaking at the Green Horizon Summit taking place in Scotland, Fink also claimed that the fund has easily beaten the initial target set at $500 million. Fink also highlighted that the world leaders should rethink about having institutions like the World Bank reformed so they can effectively harness private-sector lending.
While state-owned banks from France, Germany and Japan, alongside philanthropic institutions like Quadrivium Foundation and Grantham Environmental Trust, have provided 20% of the fund’s capital and agreed to absorb losses before other investors, many of the poorer countries across Asia, Africa and Latin America would need at least $1 trillion a year in order to transition into a low-carbon economy by the year 2050.
At the COP26 United Nations Climate Change Conference in Glasgow, Scotland, BlackRock, along with the fund’s other backers, are pushing for support of those emerging markets with climate-focused initiatives such as building solar and wind projects. With the new fund, developed nations can meet a target of mobilizing $100 billion a year and support developing nations in tackling climate change.
BlackRock is the world’s largest asset manager, managing over $9.46 trillion in assets as of 2021, with Fink being one of the earliest campaigners of sustainability linked investments and overcoming climate change. The fund also included backing by Dai-chi Life Insurance, AXA, an institutional investor, as well as TotalEnergies, a French energy company, among other 22 backers.