He does think it is inevitable some banks will pull back on lending and that stricter capital standards for banks are likely.
Amid growing political anti-ESG backlash, Mr. Fink took a more measured approach in his letter when it came to environmental, social and governance investing. Notably, he did not use the acronym ESG once in his letter, with more of a focus on investor choice around sustainable investing and the energy transition.
"Many of our clients also want access to data to ensure that material sustainability risk factors that could impact long-term asset returns are incorporated into their investment decisions," he wrote. "This is why we partner with other companies and provide insights into how a changing climate and the transition may affect portfolios over the long term."
It's not the role of BlackRock or other asset managers to "engineer a particular outcome in the economy" or act as "environmental police."
"Government policy, technological innovation, and consumer preferences will ultimately determine the pace and scale of decarbonization. Our job is to think through and model different scenarios to understand implications for our clients' portfolios," he said. "That's why BlackRock has been so vocal in recent years in advocating for disclosures and asking questions about how companies plan to navigate the energy transition. As minority shareholders, it's not our place to be telling companies what to do. My letters to CEOs are written with a single goal: to ensure companies are going to generate durable, long-term investment returns for our clients."
He pointed out that oil and gas still have a "vital role in meeting global energy demands," and that BlackRock continues to invest in fossil fuels during the energy transition.
"We are working with energy companies globally that are essential in meeting societies' energy needs. To ensure the continuity of affordable energy prices during the transition, fossil fuels like natural gas, with steps taken to mitigate methane emissions, will remain important sources of energy for many years ahead. BlackRock is also investing, on behalf of our clients, in responsibly-managed natural gas pipelines. For example, in the Middle East, we invested in one of the largest pipelines for natural gas, which will help the region utilize less oil for power production."