BlackRock, the global leader in asset management, has joined Climate Action 100 +, an organization of more than 370 investors who want to push the world of finance to act for the environment. The American manager wants to silence the accusations of “greenwashing”.
BlackRock wants to restore its image. The global asset management giant joined the influential investor group Climate Action 100 + on Thursday, committing to do more to strengthen the consideration of environmental issues within the companies whose assets they manage.
“He is one of the largest and most influential asset managers in the world, commented Emily Chew, head of the organization. BlackRock will bring even more weight to investor engagement through Climate Action 100 +. With its $ 6,800 billion in assets under management, BlackRock brings the total assets under management of the 370 investors who have signed up to Climate Action 100 + to $ 41 trillion.
BlackRock criticized for inaction on climate
In January 2018, in his annual letter to investors, BlackRock boss Larry Fink had already emphasized climate risk and the need to take it into account. “Sustainable businesses will be the best performers”, he still defended in an interview with “Echoes” in July. But the American manager has been criticized for the gap between his words in favor of the climate and the lack of concrete actions.
« Greenwashing »
In March, the NGO Ceres, which works for large groups, placed BlackRock in 43rd position – out of 48 – in the ranking of asset managers by their action in favor of the climate. According to the NGO, BlackRock would have supported barely 10% of the pro-environment resolutions proposed by the shareholders of the companies in which it has invested.
Worse, according to a study published in September by the American think tank IEEFA (Institute for Energy Economics and Financial Analysis), BlackRock’s inaction in favor of the environment would have cost 90 billion dollars to its investor clients. In particular, the exposure of its funds to fossil fuels, its investments in three companies in the sector – ExxonMobil, Chevron and General Electric – being responsible for three quarters of this underperformance.
Larry Fink: “Sustainable companies will be the best performers”
Christopher Hohn, the head of the activist fund TCI, went so far as to accuse BlackRock of “greenwashing” so as not to force its customers to be transparent about their pollution emissions.
Restore your image
With its participation in Climate Action 100 +, BlackRock therefore intends to raise the bar. His signature commits him to “Act to reduce greenhouse gas emissions throughout the value chain, according to the objectives set by the Paris Agreement” as well as to align with the transparency standards of the “Task Force on Climate-related Financial Disclosure” (TFCD). According to the Boston Consulting Group, BlackRock has recently reinforced its team responsible for understanding ESG criteria (Environment, Social, Governance), from 45 members to more than a hundred.
Climate: very large investors demand emergency measures
“The BlackRock decision underlines that the largest asset managers are now convinced that climate change is a growing risk for companies but also for the global economy”, recognizes Mindy Lubber, president of the NGO Ceres. In all likelihood, Larry Fink will soon return to the subject when he publishes his annual letter to investors.