BlackRock Inc.
BLK 0.90%
CEO Larry Fink asked companies to publish more information on how they were moving to reduce greenhouse gas emissions, furthering the company’s environmental efforts in recent years.
Mr Fink said he was focusing on the issue because of the risk that climate change poses to investor returns, as well as potential policy pressures. He urged companies to make clear how they were preparing for a global regime with a focus on “zero net” targets without emitting more carbon dioxide than it removes from the atmosphere by 2050 , a priority under the Paris climate agreement.
One of the first actions of President Biden in his post was to force the U.S. to bounce back to the climate, reflecting the administration’s higher focus on companies ’carbon footprint. . Some regulators said there was a need to better understand the effects of climate risks on the financial system.
“Companies have better sustainability disclosures as well as the interests of their own investors,” Mr Fink said in a letter released to senior company executives on Tuesday. “I urge companies to move quickly to get them out rather than waiting for regulators to force them.”
The company told futures that it would flag companies that posed a major climate threat for potential sales from their actively regulated portfolios. They also planned to disclose the proportion of its assets “parallel to net zero” with targets on that metric going forward.
Renowned for trading money on exchanges and mirror markets, BlackRock is the world’s largest money manager with $ 8.7 trillion in assets. The company has a high profile as a corporate watchdog, but BlackRock can’t just sell out of certain companies when investors ask them to track indexes. It needs to turn to other ways of motivating companies.
Mr. Fink’s letter is one way BlackRock is trying to raise its voice as a shareholder for companies in which the company’s assets are invested.
It has been a hallmark of the idea that companies cannot sustain profits if they cannot account for the needs of employees, the public and society at large. The idea is now a popular mantra. As a sign of the times, business leaders are increasingly stepping in to use their top companies to focus on social issues.
Some companies have complained that Mr. Fink is giving up and preaching.
BlackRock has drawn criticism from environmental advocates who want BlackRock to go further to promote green causes. The company has been criticized by campaigners for being soft on governance and failing to support shareholder proposals that could encourage change. At the end of 2020, BlackRock indicated that it would be more willing to consider voting for shareholder proposals that address substantial business risks.
“Climate change is no higher issue on our clients’ priority lists. They ask us about it almost every day, ”Mr Fink said in his letter this week.
Each year, Mr. Fink writes a letter to other senior officials, often in time to go public around the annual gatherings of the World Economic Forum.
The letters link to a business priority: building its brand around encouraging greater corporate exposure on environmental and social issues. The company has been expanding its line of hedge funds around sustainability and is strongly looking to capture market share in a growing, growing segment of the investment industry. . BlackRock aims to grow the approximately $ 200 billion it manages today in sustainability thematic strategies to $ 1 trillion by 2030. It has been building technology capabilities to help clients to assess investment risks from climate change.
Mr Fink said the coronavirus pandemic was an emergency crisis that would further encourage consideration of how climate change would change lives. A global energy movement that protects biodiversity can only be “achieved through leadership, coordination and support at all levels of government, working in partnership with the private sector to increase wealth,” said Mr. Fink.
Investors have been pouring more money than ever into renewable energy such as solar and solar. WSJ will look at how the pandemic, lower energy costs and global politics have led the rally – and whether it can survive. (First published December 11, 2020)
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