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The world's largest investor says a $ 3.8 trillion market faces growing climate-change risk



 Climate change Climate change threatens the $ 3.8 trillion US municipal bond market, the asset manager BlackRock warned.


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    BlackRock, the world's largest asset manager, is doubling down on its investing is garnering mainstream attention.

    "Climate-related risks already threaten portfolios today, and are set to grow, we find, "Strategists at the BlackRock Investment Institute wrote in a report this week, homing on threats the massive US municipal bond market could face as the pla net warms.

    A rising share of issuance in the $ 3.8 trillion market is coming to terms with climate-related economic losses. "

    States, cities, counties, and other government bodies issue municipal bonds ̵

    1; often called "munis" – to fund projects like building schools and highways. The muni bond market works in a similar fashion to the US Treasury market.

    BlackRock estimates that within a decade more than 15% of the S & P National Municipal Bond Index by market value will

    So how did BlackRock arrive at its projections? Rhodium Group to assess the "direct" financial damage that would come from events like flooding and hurricane-level winds, along with more "indirect" damage like the impact of temperatures on crops and labor productivity

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    Researchers at the beginning of the study refer to the "economic activity under a no-climate action"

     Estimated US [Impacts on BlackRock.] BlackRock Investment Institute

    "The most likely losers: Arizona, Gulf Coast and coastal Florida," they wrote .

    The risks across the country are asymmetric, the firm found. Under this scenario, about 58% of US metro areas would lose 1% or more of gross domestic product by 2080.

    BlackRock CEO Larry Fink has come a long way as a proponent of corporations using a social responsibility framework in their decisions. In Fink's annual letter to investors released earlier this year, he called on business leaders to address more societal issues.

    Elsewhere in the asset manager's report out this week, the strategy has added that climate change which is "increasingly a risk that investors can not afford to ignore."

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