World's largest asset manager slammed for poor climate action

16th January 2019


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Author

James Walker

Investor and shareholder advocacy groups have called on BlackRock to “vastly improve“ its climate action commitments and stewardship of highly polluting companies.

In a letter to CEO Larry Fink, nine NGOs including ShareAction and ClientEarth accused the world's largest asset manager of consistently voting against shareholder climate proposals.

This is despite “growing urgency to tackle the risk of climate change to the global economy“, with BlackRock, which has over $6.4trn (£5trn) in assets under management, said to have a worse track record than other large fund managers.

This comes in anticipation of Fink's annual CEO letter to companies, which reminds them of their need to address global challenges and deliver long-term value for shareholders and society.

Jonas Kron, senior vice president at Trillium Asset management – one of three asset managers that also signed the letter to Fink – said BlackRock must not fall behind other companies on this issue.

“As the Trump Administration's agenda makes matters worse, BlackRock has the opportunity to push for climate solutions that will benefit its customers, portfolios, and the economy upon which they depend.

“As many states, most major governments, and a growing number of private sector leaders move to support the Paris Agreement, BlackRock cannot afford to be a laggard.“

The signatories urged the firm to support a number of shareholder proposals, including a resolution from the Church of England for ExxonMobil to reduce the carbon emissions of its products.

In addition, the letter calls on BlackRock to publicly state its expectation that companies detail how they intend to align their business strategies with the Paris Agreement.

Moreover, the signatories argued that the firm should vote against remuneration policies where businesses do not agree to link incentives to climate risk.

This comes after the Intergovernmental Panel on Climate Change (IPCC) warned that the world only has to until 2030 to avoid uncontrollable global warming, with asset managers expected to play a crucial role.

“We note BlackRock's preference for an 'engagement first' process, and that its stewardship team considers voting for shareholder proposals as an escalation of BlackRock's dialogue with companies, the letter states.

In the context of the IPCC report, the systemic financial risks posed by climate change, and the ongoing failure of most climate risk vulnerable companies to develop and implement strategies compliant with the Paris goals, we believe that such an escalation is necessary.“

Image credit: iStock

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