BlackRock will acquire and integrate business and technology consultant Baringa's climate-change scenario model into its own climate-risk capability.
The money management firm entered a definitive agreement to acquire Baringa's technology, which is used by clients with more than $15 trillion in assets, with the aim of bringing it together with BlackRock's Aladdin Climate technology.
The Aladdin Climate technology is part of BlackRock's Aladdin platform, which combines risk analytics with portfolio management, trading and operations tools.
Under the agreement — in the form of a long-term partnership — BlackRock and Baringa will collaborate to set the standard for modeling the effects of climate change and the transition to a low-carbon economy on financial assets.
Baringa will leverage Aladdin Climate technology as part of its global consulting work, advising financial services firms, governments, regulators and clients on climate risk and the development of net-zero emissions strategies.
Financial terms of the deal were not disclosed, a BlackRock spokeswoman said.
"Through this partnership with Baringa, we are raising the industry bar for climate analytics and risk management tools, so clients can build and customize more sustainable portfolios," said Sudhir Nair, a BlackRock managing director and global head of the Aladdin business, in a news release.
The Baringa deal follows BlackRock's partnership with independent research firm Rhodium Group, cemented last year. That partnership aims to tackle the data challenge related to the physical impacts of climate change. Rhodium uses climate science, economics, big data and cloud computing to provide evidence-based insights into climate scenarios.
BlackRock had $9.01 trillion in assets under management as of March 31.