On the surface, BlackRock’s 2025 letter to investors takes a notable departure from ESG- and climate-related issues. But digging a little deeper, investors focused on climate risk may find signals of opportunity. The asset management giant – whose influence often sets the pace for others in industry – is betting on private markets to drive the energy transition.
With Chairman and CEO Larry Fink warning that climate change would profoundly impact asset pricing and risk, BlackRock positioned itself as a leader in sustainable investing in 2020. But in the face of political backlash – particularly from southern states in the US – BlackRock scaled back its ESG-labelled funds, citing low traction and regulatory pressures. In 2024, it liquidated seven sustainable-investing funds. By 2025, it removed ‘ESG’ from the names of more than 50 European strategies, impacting $51 billion in AUM. Alongside its recent withdrawal from the Net Zero Asset Managers initiative, BlackRock had seemingly done a 180 on its climate stance.
Yet, I remain optimistic.
Larry Fink’s 2025 letter to investors has a markedly different tone than in previous years, omitting familiar buzzwords like ‘ESG’, ‘climate’, ‘sustainability’ and ‘net zero’. But this shift in messaging doesn’t necessarily mean a retreat from climate-focused investing. Actions, in my view, speak louder than words.
And what do BlackRock’s recent actions – or, more specifically, acquisitions – say? Its purchase of Global Infrastructure Partners (GIP), an investment firm that integrates decarbonization into its strategy, signals a continued focus on climate resilience. Its acquisition of Preqin, a data provider offering transparency into private markets, underscores an intent to navigate the energy transition through alternative investments. Climate change, clearly, remains a concern for BlackRock.
Ultimately, the energy transition is here, whether we like it or not. It will require $28 trillion in investment through 2030, due largely to increased electricity demand from data centres and the essential grid transformation investments needed to support these new loads. According to the International Energy Agency (IEA), electricity demand is expected to increase by 8% by 2027, with China leading the way due to less permitting red tape. China will likely lean on a mix of solutions, ranging from battery storage to nuclear, to power this demand to scale quickly and position itself to “own the future of industry” through decarbonization, as Larry notes. BlackRock sees permitting reform and the democratization of investing as essential steps to help get the rest of the world up to speed quickly, while also helping everyday investors capture the promising returns infrastructure investments have to offer.
So how does all this play into the climate financial data and analytics landscape? There is a need from asset managers to have access to data beyond the traditional equity and bond markets. Vendors that offer expanded data sets and tools to enhance transparency in private markets will gain a competitive edge, helping investors integrate these data into portfolio management. As BlackRock deepens its focus on private markets and infrastructure, the need for high-quality, transparent private asset data will only accelerate.
