BlackRock CEO Sees Looming Global Savings Crisis

Zero hour for retirement funding. BlackRock Chair and CEO Larry Fink’s annual letter to investors describes what he calls a global retirement crisis. BlackRock therefore has a sizable stake in spearheading solutions to the crisis: Half of the $10 trillion in assets managed by world’s largest asset manager are retirement funds. He also (gently) raised the specter of raising the retirement age and cited policies to promote savings in countries such as Australia and Japan.

In his letter, published March 25, 2024, Fink makes no mention of environmental, social, and governance (ESG) initiatives; he swore off usage of the politically charged moniker more than a year ago amid growing dissent for “woke” policies. Fink does, however, devote part of this year’s letter to climate investing, noting that the transition to green energy was inevitable.

“It’s a mega force, a major economic trend being driven by nations representing 90 percent of the world’s G.D.P.,” he writes.

Among the findings of Farient’s 2024 Global Trends in Stakeholder Incentives: What’s Next? report was a steep increase in stakeholder incentives tied to emissions greenhouse gas (GHG) reductions.

Fink says BlackRock embraces “energy pragmatism.” The need for energy security will require many countries to rely on hydrocarbons for years, along with cleaner energy sources.

“Nobody will support decarbonization if it means giving up heating their home in the winter or cooling it in the summer,” he wrote. “Or if the cost of doing so is prohibitive.” Fink added that BlackRock hasn’t advocated divesting from traditional oil and gas companies, in part because some like Occidental Petroleum Corp. are investing in next-generation green tech such as carbon capture from the air.