London Climate Action Week: Spotlight on Female Leaders in the City

Q&A with Amelia Tan, Director, EMEA Head of Platform Strategy and Innovation, Blackrock.

To celebrate the 1st London Climate Action Week, CDSB is profiling a select number of female leaders in the City who we consider to be at the forefront of taking action on climate change and related issues. In this Q&A we sit down with Amelia Tan, EMEA Head of Platform Strategy and Innovation, Blackrock. 

1. What inspired you to embrace climate change in your current role? 

I first learned about sustainable investing when I was working on a project to develop a sustainable investment product strategy for BlackRock in Europe. I hadn’t considered that sustainability and investing were compatible. If anything, I thought that one would have to trade off investment returns in order to meet any sustainability objective. I had assumed that to invest sustainably, I would have to cut whole sectors out of an investment portfolio, which would lead to a more restricted universe and hence, impact an investor’s ability to reap the benefits of portfolio diversification. I was wrong. In fact, addressing sustainability risks and opportunities, whether it’s how a company manages data privacy or is positioned for a low carbon economy, makes for a more holistic approach to investing. And climate change poses arguably the biggest challenge to society and investors alike. The trouble with climate change is that the effects of it are less visible and perceived by many as distant. There are so many more immediate events to worry about, such as Brexit, the US-China trade war, geopolitical eruptions. Knowing that this results in a bias toward inaction, I find myself more passionate about addressing climate change through investing. And I have found that even the most environmentally conscious people, who pay close attention to what and how they consume, often forget that one of the most powerful ways they can advance their sustainability objectives, is to align their savings and retirement portfolios to these goals. Being part of the Sustainable Investing team in a firm like BlackRock, I have a unique opportunity to drive change in investment behaviour, not just of our own investors in the firm but of all investors, institutions and individuals alike.

2. What advice would you give to those looking to pursue a similar path in their organisation? 

To those who are looking to pursue a career in sustainable investing, firstly, the good news is that there is no single entry point. Our team is made up of people who are straight-up environmental, social and governance (ESG) analysts, but also engineers, quants, lawyers, veterans and even tech entrepreneurs. Secondly, it helps to start from what you know best and to consider how sustainability can be incorporated in what you’re skilled at or interested in doing. And finally, have peripheral vision. Meet people outside of your immediate circle of influence, learn about topics that aren’t directly related to your everyday job. These often bring opportunities and ideas that you can capitalise on. And when you’ve found a potential winner of an idea, don’t be afraid to put into action and be the champion for it.

3. Why are climate and ESG factors so important for those working in your sector today?

At Blackrock, we believe that climate factors have been underappreciated and underpriced. There are two primary sources of climate-related investment risk: physical risk and transition risk. Physical risk captures the impacts of environmental change on financial performance. Extreme weather events cast a spotlight on climate-related risks but are notoriously hard for investors to grasp. You can’t rely on analysis based on long periods of historical data because global temperatures are rising over time and hence the frequency and severity of extreme weather events are also increasing. By drawing on the latest granular climate modelling and big data techniques, we have found that physical risks are inadequately priced by markets. Understanding and integrating these insights can help enhance portfolio resilience. Transition risk describes the risks (and potential opportunities) arising from regulatory and technological changes associated with the transition to a low carbon economy. Since COP 21, policymakers around the world have implemented significant regulatory changes that will impact how we generate and consume energy. This has been supported by technological advancements that have led to reduction in the cost of renewable energy and enhanced performance of energy storage. The transition to a low-carbon economy will create winners and losers and will ultimately impact long-term investment performance. We believe that by assessing how well positioned a company is to operate within a low carbon economy, we can empower investors to make better informed decisions .

4. What do you consider to be your biggest achievement to date?

My focus is on delivering a suite of sustainable investment funds to meet the needs of European investors. What started as a handful of products when I first joined the team in 2016 is now over sixty strong, ranging from exclusionary screened based funds, to ESG, thematic and impact investments, such as renewable energy and green bonds. I can’t take sole credit for this of course because it has truly been a firm-wide effort. What has surprised me was that I thought I had joined a rather niche part of the firm, but instead have found that the momentum for sustainable investing has swept the firm. It is a strategic priority for us not just because our clients demand it, but because we all recognise that it makes us better investors.

Read more interviews with Female Leaders in the City here.