BlackRock Puts Weight Behind Climate Change Agenda

Tom Burroughes

13 January 2020

BlackRock has joined the world’s largest group of investors putting pressure on companies to tackle climate change, the US-listed firm that holds $6.963 trillion of assets (as at Sept. 30 2019) has confirmed to this news service.

The Wall Street Journal reported January 9 that the firm, which is the largest asset management house in the world, has joined Climate Action 100+, and acted after it was criticized for not doing enough to push for change. Given its size, BlackRock is larger than any sovereign wealth fund run by a state government.

“BlackRock has become a signatory to Climate Action 100+. This is a natural progression of the work our Investment Stewardship team has done to date. We believe evidence of the impact of climate risk on investment portfolios is building rapidly and we are accelerating our engagement with companies on this critical issue,” a spokesperson told Family Wealth Report.

The devastating forest fires in Australia, stories of plastic waste in oceans, melting glaciers and last September’s Hurricane Dorian that smashed the Bahamas have helped fuel further concern over whether the human race is affecting the climate in damaging ways. Environmental, social and governance (ESG)-themed investing has gone from being a fringe issue to an ever-present topic of wealth management conversation.

Launched in 2017, Climate Action 100+ is a group of more than 370 institutional investors, including the money management arms of HSBC and UBS, which now represents around $41 trillion in assets thanks to BlackRock’s membership, up from $35 trillion.

The WSJ noted that Climate Action+ has successfully pressured oil giants Royal Dutch Shell and BP PLC to set targets to reduce emissions and disclose more data.

“BlackRock is responding to the demands of its asset owner clients and other groups globally that they take meaningful action to address climate change,” Fiona Reynolds, member of the Climate Action 100+ Steering Committee and chief executive of the Principles for Responsible Investment, was quoted as saying.

In 2017, BlackRock and Vanguard, the two biggest US-based fund managers, voted to require Exxon Mobil to produce a report on climate change (CNBC, October 16, 2019). That move was seen as a watershed moment, but climate change activists have been disappointed by an alleged lack of action since.