BlackRock under climate campaigners fire
Published by MAC on 2018-09-29Source: Investmentweek.co.uk
Ever wondered which outfit is the largest owner of fossil fuel companies and single largest contributor to climate destruction?
According to a distinguised group of environmental defenders, this sorry role is played by the world's largest single investment bank - BlackRock.
Environmental campaign targets BlackRock amid claims of 'climate destruction'
Calls out Fink for failing to 'walk the talk'
Mike Sheen
Investor
26 September 2018
An environmental campaign has criticised BlackRock for allegedly being the "largest owner of fossil fuel companies and single largest contributor to climate destruction", and singled out CEO Larry Fink as failing to manage the business in line with his own expectations of stocks the firm invests in.
'BlackRock's Big Problem', which is a collaboration between leading climate and human rights organisations, including Amazon Watch, Friends of the Earth, and the Sierra Club, has demanded BlackRock, which has $6.3trn in AUM [Assets under Management], stops "investing in climate destruction", via its investment in fossil fuels.
Campaigners are taking part in a demonstration in New York on 26 September for Climate Week where they will gather outside the Bloomberg Global Business Forum and argue BlackRock is one of the largest investors in oil and gas companies, the largest investor in new coal plant development worldwide, and the largest US investor in rainforest destruction.
In its campaign material, it said that although Fink "wants to be a model corporate citizen", citing his philanthropy and involvement in an conservation organisation, BlackRock is failing to "walk its talk".
The campaign cited a recent quote from Fink, in which he said: "Society is demanding that companies, both public and private, serve a social purpose.
"Every company must not only deliver financial performance, but also show how it makes a positive contribution to society."
Despite this, the campaign claims, BlackRock offers no transparency into its shareholder engagement practices and votes against shareholder demand for climate action.
It added: "Worse, BlackRock pretends its ownership doesn't count, that it has no responsibility for the impacts of the companies it owns."
Specifically, the campaign demands three [four] things from BlackRock:
* Divest from fossil fuel companies that won't change their practices.
* Prioritise fossil fuel and deforestation free funds.
* Rigorously push companies it owns to align their goals with the Paris climate agreement.
* Escalate pressure on industry laggards through transparent shareholder engagement
Commenting on the campaign, a BlackRock spokesperson said: "Virtually all of these shares are held in index funds.
"Index providers determine which companies to include in the indices they create.
"As a fiduciary, BlackRock offers clients funds, like ETFs, that are designed to track the investment results of third party indices."