Quantcast
Environmental News for a Healthier Planet and Life

Help Support EcoWatch

World’s Largest Fund Manager to 'Reshape' Investment Portfolio to Consider Climate Crisis, Sustainability

Business
In response a report by Majority Action, members of New York Communities for Change (NYCC), Mothers Out Front (MOF), Sunrise Movement NYC, Sierra Club and 350Brooklyn gathered for a press conference on Sept. 17, 2019 outside BlackRock offices in New York City. Erik McGregor / LightRocket via Getty Images

BlackRock, an investment fund that manages nearly $7 trillion, will "reshape" its strategy toward investments that support environmental sustainability, according to a letter to investors from its founder and Chief Executive Larry Fink, as The New York Times reported.


In the letter, Fink wrote, "Climate change has become a defining factor in companies' long-term prospects … But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance. The evidence on climate risk is compelling investors to reassess core assumptions about modern finance."

BlackRock's assets include massive investments in fossil fuels, including big oil producers such as BP, Shell and ExxonMobil. The investing giant has drawn the ire of environmentalists by routinely dismissing the climate crisis and voting against shareholder actions to direct corporate boards to address the growing climate emergency, as The Guardian reported.

Activists hailed the new declaration that the climate crisis will steer BlackRock's future investments. Bill McKibben, the founder of 350.org, which campaigns for divesting from fossil fuels, wrote on Twitter, "Biggest news in a long time. After a ton of pressure, Blackrock — which owns more fossil fuel stock than anyone on earth — announces it will put 'climate change at the center of its investment strategy.' A huge — if by no means final — win for activists!"

The ton of pressure McKibben referred to reached a fever pitch after BlackRock ranked amongst one of the companies with the worst voting records on climate issues. Last month, British hedge fund manager Christopher Hohn said it was appalling that BlackRock did not require companies to disclose sustainability efforts. Activists had staged protests outside BlackRock's office, and members of congress wrote to Fink to urge more climate-related investing, as The New York Times reported. Last month, in an interview with the Financial Times, former Vice President Al Gore asked if passive managers like BlackRock's would like "to continue to finance the destruction of human civilization, or not?"

"BlackRock remains waist-deep in fossil fuel investments and the world's top backer of companies that destroy the Amazon rainforest and ignore the rights of indigenous people," said Extinction Rebellion, as The Guardian reported.

BlackRock's plans to address the climate crisis will start with abandoning investments that "present a high sustainability-related risk," like coal producers. Fink hopes that BlackRock's lead will encourage every company, not just energy companies, to assess their carbon footprint, as The New York Times reported. BlackRock will also ask the companies it invests in to disclose plans for helping the world adhere to the Paris agreement to keep warming below 2 degrees Celsius above pre-industrial times, according to CNN.

The largest impact may be if BlackRock's decision is a watershed moment that triggers a conversation amongst financiers and policymakers about the climate crisis. It will also put pressure on other large financial players to articulate a clear sustainability strategy, as The New York Times reported.

Not only is changing an investment strategy to support sustainability good for combating the climate crisis, but it can also be profitable. As The New York Times pointed out, "Had Mr. Fink moved a decade ago to pull BlackRock's funds out of companies that contribute to climate change, his clients would have been well served. In the past 10 years, through Friday, companies in the S&P 500 energy sector had gained just 2 percent in total. In the same period, the broader S&P 500 nearly tripled."

BlackRock will also join Climate Action 100+, which bills itself as an investor initiative to to ensure the world's largest corporate greenhouse gas emitters take necessary action on climate change.

While BlackRock's intention to join was welcomed by activists, anger and resentment lingers over the firm's past actions.

"Joining Climate Action 100+ is just a first step in the right direction for BlackRock; it must also respond to the fact that it is the world's biggest investor in deforestation," said Moira Birss, finance campaign director for Amazon Watch, in a press release. "The Amazon fires last fall and the wildfires in Australia today show the immense risk to the climate, forests, and indigenous peoples that deforestation-risk commodities pose. BlackRock must make its engagement with companies public and transparent with clear policies, deadlines, and ambitious timelines for shifting capital out of the worst offenders if they won't change."

EcoWatch Daily Newsletter

By Michael Svoboda

The enduring pandemic will make conventional forms of travel difficult if not impossible this summer. As a result, many will consider virtual alternatives for their vacations, including one of the oldest forms of virtual reality – books.

Read More Show Less
Public Employees for Environmental Responsibility on Thursday accused NOAA of ignoring its own scientists' findings about the endangerment of the North Atlantic right whale. Lauren Packard / Flickr / CC BY 2.0

By Julia Conley

As the North Atlantic right whale was placed on the International Union for Conservation of Nature's list of critically endangered species Thursday, environmental protection groups accusing the U.S. government of bowing to fishing and fossil fuel industry pressure to downplay the threat and failing to enact common-sense restrictions to protect the animals.

Read More Show Less
Pexels

By Beth Ann Mayer

Since even moderate-intensity workouts offer a slew of benefits, walking is a good choice for people looking to stay healthy.

Read More Show Less
Much of Eastern Oklahoma, including most of Tulsa, remains an Indian reservation, the Supreme Court ruled on Thursday. JustTulsa / CC BY 2.0

Much of Eastern Oklahoma, including most of Tulsa, remains an Indian reservation, the Supreme Court ruled on Thursday.

Read More Show Less
The Firefly Watch project is among the options for aspiring citizen scientists to join. Mike Lewinski / Wikimedia Commons / CC by 2.0

By Tiffany Means

Summer and fall are great seasons to enjoy the outdoors. But if you're already spending extra time outside because of the COVID-19 pandemic, you may be out of ideas on how to make fresh-air activities feel special. Here are a few suggestions to keep both adults and children entertained and educated in the months ahead, many of which can be done from the comfort of one's home or backyard.

Read More Show Less
People sit at the bar of a restaurant in Austin, Texas, on June 26, 2020. Texas Governor Greg Abbott ordered bars to be closed by noon on June 26 and for restaurants to be reduced to 50% occupancy. Coronavirus cases in Texas spiked after being one of the first states to begin reopening. SERGIO FLORES / AFP via Getty Images

The coronavirus may linger in the air in crowded indoor spaces, spreading from one person to the next, the World Health Organization acknowledged on Thursday, as The New York Times reported. The announcement came just days after 239 scientists wrote a letter urging the WHO to consider that the novel coronavirus is lingering in indoor spaces and infecting people, as EcoWatch reported.

Read More Show Less

Trending

A never-before-documented frog species has been discovered in the Peruvian highlands and named Phrynopus remotum. Germán Chávez

By Angela Nicoletti

The eastern slopes of the Andes Mountains in central Perú are among the most remote places in the world.

Read More Show Less