BlackRock has signed a definitive agreement to acquire and integrate Baringa Partners’ Climate Change Scenario Model into Aladdin Climate technology.

Baringa’s Climate Change Scenario Model helps clients with assets totalling over $15trn to manage climate risk and the reallocation of capital to achieve net zero.

The deal is part of a long-term partnership between both parties, which aims to set the standard for modelling the impacts of climate change.

The companies will work together to develop climate risk models enhancing Aladdin Climate, and other climate analytics solutions.

Under the tie-up, Baringa will leverage the core Aladdin Climate capabilities as part of its consulting work in governments, regulatory bodies, advising financial services, and clients across all sectors on climate risk and developing net zero strategies.

Aladdin Climate was launched by BlackRock to bridge the gap in climate analytics and to help clients understand and mitigate the financial impacts linked to climate change on their portfolios.

BlackRock Global head of the Aladdin Business Sudhir Nair said: “Investors and companies are increasingly recognising that climate risk presents investment risk.

“Through this partnership with Baringa, we are raising the industry bar for climate analytics and risk management tools, so clients can build and customise more sustainable portfolios.”

Nair also added that the integration of Baringa’s models and the ongoing collaboration between the firms will enhance Aladdin Climate’s capabilities and help clients understand transition risks in more sectors and regions.

Baringa global head of climate solutions Colin Preston said that the integration of its Climate Change Scenario Model into BlackRock’s Aladdin platform will inform the reallocation of capital across the global economy, accelerating the transition to net zero.

Baringa’s solutions are designed to support net zero commitments, TCFD reporting, regulatory reporting, investment, and capital allocation strategies.

In February this year, BlackRock teamed up with Snowflake to connect its Aladdin risk management platform with Snowflake’s Data Cloud.