Paul Holland, managing director and venture capitalist-in-residence, at US-based venture factory Mach49, interviewed Jim Barry, chief investment officer of asset manager BlackRock Alternatives Investors and global head of BlackRock Real Assets.
Barry spoke of the bygone era of cleantech 1.0 a decade ago and characterised it as “a far more turbulent time when a lot of money was lost” but added that there had been a “classic recovery of the hype cycle” since.
In the new context of climatetech investing today, he stressed that BlackRock had a big role to play, considering its over $10 trillion of assets under management: “Blackrock has an enormous word to say in what we are trying to achieve in the next 30 years.” He also pointed that the firm takes the question to heart as a fiduciary issue.
Barry also described that the task of decarbonising the world’s economy is complex: “We have to change and it has to happen in a very short time. It is the most extraordinary transformation the world economy has ever attempted. The classic corporate reaction to such change is to resist but delaying is not going to change the fact that we have to change.”
However, he also warned that, from an investment standpoint, the situation is different, as it is not necessarily driving this push for change. “We have seen costs going down in solar and wind energy but that has only been the case because of tens of billions of dollars in subsidies. It did not happen by accident.”
He pointed out the challenges around electrifying mobility and heavy industry are daunting and there is an indispensable need for proper policy-making: “If we do not get a policy in a cohesive way, it is going to be very difficult.”
He also spoke of how reaching net-zero by 2050 would also require a considerable deployment of capital in emerging markets to address relevant climate issues. This potential transfer of capital to such countries creates both problems and opportunities. “We have got to find the balance to do that. We are working on cracking the code to some of these challenges.”
Barry also commented that Blackrock is always looking to engage with corporates on many levels in terms of sustainability and net-zero objectives, making sure they are addressing it as a financial risk. He described the firm jokingly as “having candy store capability and confidence”. He said: “Blackrock has a big voice and it is ready to use it.”
