World’s largest asset manager says Russian invasion of Ukraine will accelerate decarbonisation

SMH , The Age

By Charlotte Grieve

The world’s largest asset manager expects the Russia-Ukraine war will accelerate the shift to green energy as global economies seek to become self-sufficient in their power supply.

Blackrock’s prediction comes as Vladimir Putin’s Russia holds about 25 per cent of the world’s global gas supplies, prompting fears the Kremlin will withhold supplies from dependent European nations, or punitive global economic sanctions will push up energy prices to unaffordable levels.

“Energy now is moving from just a green issue, it’s clearly becoming a broader societal issue, including self-reliance and the importance of being able to have resilient energy infrastructure,” said Ben Powell, Blackrock’s chief investment strategist for the Asia Pacific region, during an online webinar organised by the asset manager on Wednesday.

Some federal politicians, including Nationals senator Matt Canavan, have used the Russian invasion of Ukraine to urge Australia to rethink its move away from coal, oil and gas as its main energy sources.

But Mr Powell said recent geopolitical instability would only serve to accelerate the green power transition and remind global leaders of the importance of energy independence.

“We would see this, sadly of course, as an accelerant of the transition towards energy sources of the future and away from some of the infrastructure of the past, which has sadly shown to be fraught with, let’s say, challenges over the last several weeks,” he said.

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Mr Powell said business and political leaders were increasingly prepared to “sacrifice” efficiency for resilience when investing in industries that are critical to the functioning of society, such as power generation and healthcare.