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BlackRock to buy Baringa Partners’ climate model for Aladdin platform

Acquisition part of a ‘long-term’ partnership between investment giant and consultant

BlackRock has today announced that it is set to acquire consultant Baringa Partners’ climate change scenario model in a bid to “enhance” the climate capabilities of its risk management system Aladdin.

The financial details and terms were not disclosed. 

The acquisition is part of a “long-term partnership” between the world’s largest investor and the UK-headquartered consultant, which BlackRock claims will “set the standard for modelling the impacts of climate change and the transition to a low-carbon economy on financial assets for investors, banks and other clients”.

Baringa’s Climate Change Scenario Model is currently used by clients representing more than $15trn in assets, informing “net zero commitments, TCFD [Task Force on Climate Related Financial Disclosures] reporting, regulatory reporting, investment and capital allocation strategies, as well as developing climate risk management capabilities”. 

Last year, it was reported that investment giant Legal & General had adopted Baringa’s model and was using it to develop its TCFD report. 

In addition to working together to develop climate risk models that underpin Aladdin, the partnership will also see Baringa use Aladdin Climate, which is offered through BlackRock’s Aladdin platform, as part of its consultancy work advising financial services, governments, regulatory bodies, and clients across all sectors.  

“Investors and companies are increasingly recognising that climate risk presents investment risk,” said  Sudhir Nair, Global Head of the Aladdin Business at BlackRock. “The integration of Baringa’s models and the ongoing collaboration between our firms will enhance Aladdin Climate’s capabilities, helping our clients understand transition risks in more sectors and regions than ever before.”