Chronic Climate Risks Underestimated by Investors, Says BlackRock
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Chronic Climate Risks Underestimated by Investors, Says BlackRock
- BlackRock, which manages over $1 trillion in sustainable and transition assets, indicates that many investors are not adequately preparing for the gradual, long-term financial impacts of climate change.
- Louise Kooy-Henckel, BlackRock's Global Head of Sustainable and Transition Solutions, emphasized this point at an event on Monday, September 7, 2026.
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BlackRock, a leading global asset manager, has voiced concerns that financial markets are not fully accounting for the chronic, slow-moving risks associated with climate change. Louise Kooy-Henckel, BlackRock’s Global Head of Sustainable and Transition Solutions, stated at a Hong Kong event on Monday, September 7, 2026, that these risks are not yet priced into market valuations.
Chronic climate risks refer to the gradual but persistent destruction of asset values over time due to climate-related factors. These include long-term shifts like rising sea levels, changing precipitation patterns, and increasing temperatures, which can impact infrastructure, real estate, and various industries. BlackRock has previously highlighted that extreme weather events, such as wildfires and hurricanes, pose tangible risks to investment portfolios today.
In past research, BlackRock, in collaboration with Rhodium Group in 2019, found that many U.S. markets, particularly electricity utilities, commercial real estate, and municipal bonds, were consistently underpricing the physical climate change risks to their businesses. For instance, their analysis suggested that 58% of metropolitan areas could face climate-related GDP reductions of 1% or more by 2060-2080 if no decisive action is taken.
Kooy-Henckel, who was appointed Global Head of Sustainable and Transition Solutions in June 2026 after serving as EMEA Head since early 2025, leads BlackRock’s efforts in sustainable and transition investing. BlackRock maintains that climate risk is investment risk and aims to help clients make informed choices to improve their investment outcomes. The firm manages over $1 trillion in sustainable and transition assets and offers more than 500 dedicated strategies in this area.