BlackRock – Investment – Road to “net-zero greenhouse gas emissions”

Background

An interesting scenario is playing out within the financial investment community, climate change watchers, and government institutions.

Governance

United Kingdom

Parliament Committee

  1. LONDON (Reuters) – BlackRock, the world’s biggest asset manager, told a British parliamentary committee that it will not stop investing in coal, oil and gas, and that its role was not to “engineer a specific decarbonization outcome in the real economy.”
  2. The response was part of tens of statements from companies to the Environmental Audit Committee, which is examining the role of financial institutions, including UK signatories to the Glasgow Financial Alliance for Net Zero (GFANZ). The responses were published on the government’s website.
  3. The GFANZ calls itself the world’s largest coalition of financial institutions committed to transitioning the global economy to net-zero greenhouse gas emissions, with 500 members from over 45 countries.
  4. When asked by the committee whether it would support a net-zero scenario that called for “no new investment is needed in coal, oil, and gas,” BlackRock said: “No.”
  5. BlackRock’s role in the transition is as a fiduciary to our clients – it is not to engineer a specific decarbonization outcome in the real economy,” said the New York Stock Exchange-listed company with a market value of $85.65 billion, which manages assets worth about $8 trillion.
  6. Another responder HSBC, which has also been attacked by climate activists, said continued investment in existing sources of oil production was needed. It said an abrupt shift away from coal would hurt many Asian and developing economies where more people depend on coal.

United States

Conservative States

Missouri ( Show Me State )

  1. Missouri has pulled $500 million out of pension funds managed by BlackRock Inc, state Treasurer Scott Fitzpatrick said on Tuesday, over the asset manager’s environmental, social and governance (ESG) “priority” over shareholder returns.

Louisiana ( Creole State )

  1. Several Republican-led states have sought to cut business ties with BlackRock over its ESG push, with Louisiana earlier this month saying it would pull $794 million out of the company’s funds.

 

Caught In The Middle

  1. While environmentalists have protested that the world’s largest asset manager does too little to press for change at fossil fuel portfolio companies, Republican politicians have accused it of boycotting energy stocks.
  2. Environmentalists have protested that BlackRock does too little to press for change at fossil fuel portfolio companies, while Republican U.S. politicians have accused it of boycotting energy stocks
  3. BlackRock’s boss Larry Fink has defended the company’s energy investments from criticism from many sides in the debate on low-carbon fuels.
  4. “BlackRock is developing tools that help our investors and clients assess how the transition is likely to unfold and to support clients’ navigation of the transition and – for those who choose – to accelerate it.”
  5. Chief Executive Officer Larry Fink last week defended the company’s investments, saying “being attacked equally by the left and the right so I’m doing something right”.

 

Referenced Work

  1. Reuters
    • BlackRock tells UK ‘no’ to halting investment in coal, oil and gas
      Link
    • Missouri pulls $500 mln from BlackRock over asset manager’s ESG push
      Link

 

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