BR Flashcards
About me
- Graduated from Columbia in 2020 with a Neuroscience degree
- I have worked in Energy Derivatives at J.P. Morgan since graduating
- In my current role at J.P. Morgan, I help companies that have exposure to energy markets manage their price risk in a variety of ways; this includes:
- Trading financial derivatives
- Conducting in-depth market research and translating complex market information into useful insights for clients
- Preparing marketing materials and presenting to clients and senior stakeholders
- Conducting data analysis on trade flow and revenue trends
- Supporting clients with their energy transition goals
- Educating clients on different
- Prior to my current role, I ran a non-profit organization called AlterNATIVE Education that focused on providing educational resources and college prep to Native American youth
- Through this program, I traveled to Native American reservations across the country to teach youth programs focused on educational opportunities, sustainability, and youth empowerment
- In addition to this, I also worked in nonprofit consulting where I focused on data analytics and developing metrics to quantify social impact and I also worked at a geopolitical consulting firm where I focused on corporate strategy to help the company grow from an initial start-up to a successful firm
I am fascinated by energy and I’m passionate about sustainability
Why BlackRock?
BlackRock has been at the forefront of the climate transition and I admire how aggressive BlackRock has been in supporting ESG initiatives and how many tangible actions it has taken
- Manages billions of dollars in sustainable assets
- Integrates ESG risk considerations into their active investment process
- Created more than 200 new sustainable funds
- Formed Decabonization Partners
- Built Aladdin Climate to quantify climate risks and opportunities in financial terms
And this is even reflected in Blackrock’s principals — the fifth being, committing to a better future and having a long term view about sustainability
“Every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?” - Larry Fink, 2022 Letter to CEOs
REACTIVE → PROACTIVE
Demonstrated that ESG & sustainability issues are business issues, and making an impact while also being financially successful are not mutually exclusive
Why the Sustainable & Transition Solutions role?
Challenging and meaningful
I really like how this role would allow me to work with a wide range of teams, gain visibility into many parts of the firm, on a variety of projects across the sustainability ecosystem — it’s important to me to be in a role where I’m continuing to grow and learn new things, which this role would provide
I’m incredibly passionate about sustainability
BlackRock’s sustainable ETFs
ESG Aware (EGSU) ETF: tracks an index of U.S. companies that have positive ESG characteristics
Global Clean Energy ETF (ICLN) tracks global equities in the clean energy sector
Low Carbon Target ETF = tracks developed and emerging market equities with a lower carbon exposure than that of the broad market
Global Sustainable Development Goals ETF = tracks companies aiming to solve one of the UN’s SDGs (sustainable development goals)
Sustainable & Transition Solutions pillars
Strategy & Transformation – sets firmwide sustainability strategy and drives cross-functional commercial, regulatory and reputational initiatives.
Policy & External Engagement – partners with External Affairs to engage on policies that affect balanced investment strategies, product innovation and regulatory compliance.
Client Engagement & Sales – drives the commercialization of our sustainable and transition strategies in partnership with sales teams and product strategists.
Content strategy – develops and coordinates thought leadership and communications with clients and other partners.
ESG and scopes
Set of standards that socially conscious investors measure to screen good investments outside of pure financials
Environmental = climate risk, natural resource scarcity, environmental impact (1,2,3)
Ex: energy efficiency, deforestation
Social = how a company fosters its people, culture, and community
Ex: Labor standards, data protection, community outreach, corporate giving, DEI
Governance = a company’s internal process and procedures
Ex: company leadership, internal controls, business ethics
Scope 1 = BURN = emissions that the company directly owns and controls; ex: fuel for trucks, power equipment, etc.
Scope 2 = BUY = emissions that a company indirectly causes when the energy they purchase is produced; ex: heating/AC, electricity
Scope 3 = BEYOND = ex: transport and production of raw materials company uses, decomposition in landfill
BlackRock principals
- We are a fiduciary to our clients.
our integrity and the unbiased advice we give our clients. - We are One BlackRock.
collaborative, diverse, equitable environment
“A diverse workforce is indispensable to our creativity and success.” - We are passionate about performance.
We are lifelong students – of markets, of technology, and of the world. - We take emotional ownership.
In everything we do, we are emotionally invested in our clients’ futures. - We are committed to a better future and having a long term view about sustainability
What is Aladdin and Aladdin Climate?
Aladdin is a tech platform that unifies the investment management process across public and private markets—through a common data language—to enable scale, provide insights, and support business transformation.
Aladdin Climate quantifies the financial impact of climate-related risks and opportunities in financial terms – bridging climate science, policy scenarios, asset data, and financial models to arrive at climate-adjusted valuations and risk metrics
Environmental markets
Renewable Energy Credits - environmental attributes of renewable power
Regional Greenhouse Gas Initiative (RGGI) - cap & trade on carbon emissions; trade allowances
California Carbon Allowances (CCAs)
Voluntary Carbon Credits: credits that represent the avoidance, reduction, or removal of carbon
BlackRock’s sustainability strategy focuses on two structural themes driving this change:
TRANSITION FINANCE: The transition to a low-carbon economy demands a transformation of the entire economy. All companies will be profoundly affected by this change
STAKEHOLDER CAPITALISM: It is clear that putting your company’s purpose at the heart of your relationships with your stakeholders is critical to long-term success. We help clients meet their social and financial objectives by linking sustainability with financial returns.
Importance of ESG
Research has shown that companies with firm ESG profiles can often outperform their peers over the long term. BlackRock’s research has shown that in 2021, 70% of a selection of broad-market ESG indices outperformed their non-ESG counterparts.
ESG considerations can be a crucial part of risk management, as they can help identify and mitigate various risks that can impact financial performance. For example, environmental risks such as climate change or water scarcity can significantly impact companies’ operations and financial performance.
ESG insights help reveal risks and opportunities that aren’t typically captured in traditional financial analysis.
These insights can help provide a more informed view of a company.
Example of an ESG risk: A company with weak data security protocols may be vulnerable to a data breach, resulting in potential negative long-term performance.
Example of an ESG opportunity: A company investing in clean technologies to make supply chains more energy efficient and reduce energy costs, resulting in potential positive long-term performance.
Investing in the net zero transition / importance of fossil fuels
A clear understanding of the transition is vital to achieving better long-term returns.
Identifying carbon-intensive companies that are positioning themselves to lead decarbonization within their industries
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Oil and gas price volatility can be an additional incentive to accelerate the energy transition, but in the short term it may move the world further away from the path to net zero. In 2022, for example, the world shifted to more carbon-intensive fuels, particularly coal, resulting in record-high emissions. Additionally, acute shortages of energy supply could result in social and economic pain—for example, what Sri Lanka is currently experiencing—via a higher cost of living and lower economic growth, and may severely impair the ability of many emerging economies to invest in clean energy sources. Indeed, in response to a crisis, some of these countries may opt to build fossil fuel assets in excess of what is necessary—another undesired outcome.
improved maintenance routines to reduce intermittent flaring
vapor-recovery units to reduce methane leaks
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Ex: Vicki Hollub, CEO of Occidental
- Target to be net-zero by 2050 (scope 1, 2 by 2040) (scope 3 by 2050)
- Developing direct air capture technology
We cannot reach our 1.5 degree target without the oil and gas industry being heavily involved
Occidental Petroleum
Vicki Hollub, CEO of Occidental
- Target to be net-zero by 2050 (scope 1, 2 by 2040) (scope 3 by 2050)
- Developing direct air capture technology
We cannot reach our 1.5 degree target without the oil and gas industry being heavily involved
COP
COP = Conference of the Parties = a committee of ~150 countries that meet annually to discuss how exactly climate goals can be achieved, and monitor what progress has been made
COP26 (2021): Glasgow, Scotland
COP27 (2022): Egypt
COP28 (2023): UAE
COP27 (Egypt last year): Created Loss and Damage Fund
COP28 (UAE this year):
Which countries and industries will pay for the Loss and Damage fund, and how much?
To remain under the 1.5 degree limit, global emissions would need to be cut by 43% by 2030; but at our current pace, emissions will dip by less than 1% by then
Countries will be expected to come with stronger, more ambitious climate plans to lower global emissions
The 2023 UN Climate Change Conference will convene in Nov/Dec 2023 in Dubai, UAE
- Need to accelerate the deployment of clean technologies to put emissions into decline
- Crucially, this includes mobilizing more financing for clean energy investments in emerging and developing economies.
- Logistics of the Loss and Damage Fund; $100b committed to Adaptation finance should be met this year; finance for actions that help communities reduce the risks they face climate hazards like storms or droughts
UAE named Sultan Al Jaber, the CEO of the Abu Dhabi National Oil Company (ADNOC), as president of this year’s COP 28.
Al Jaber’s rich background in both renewables and fossil fuels make him an ideal choice at a time when efforts to address climate change have been far too slow, lacking the inclusivity to produce more transformative results.
Al Jaber is CEO of the world’s 14th largest oil producer, but he at the same time was the founding CEO of Masdar, one of the world’s largest renewables investors. He also represents a country that despite its resource riches has become a major nuclear power producer, was the first Middle East country to join the Paris Climate Agreement and was the first Middle East country to set out a roadmap to net zero emissions by 2050.
Over the past 15 years, the UAE has invested $40 billion in renewable energy and clean tech globally.
~70% of the UAE economy is generated outside the oil and gas sector, making it an exception among major producing countries in its diversification.
UN SDGs
Sustainable Development goals (SDGs) = created by the UN in order to promote a better future world by 2030
No poverty
zero hunger
good health and well-being
quality education
gender equality
clean water and sanitation
affordable and clean energy
reduced inequalities
sustainable cities and communities
responsible consumption and production
climate action
life below water
life on land
peace, justice, and strong institutions
