Jan 26, 2021 - Energy & Environment

BlackRock vows tougher climate scrutiny

Picture of BlackRock CEO Larry Fink

BlackRock CEO Larry Fink. Photo: Ramin Talaie/Corbis via Getty Images

BlackRock is calling on companies to "disclose a plan for how their business model will be compatible with a net-zero economy," per the New York Times' coverage of CEO Larry Fink's annual letter this morning.

Why it matters: BlackRock is the world's largest asset manager. And per the NYT story, they're vowing to back up their call by throwing more weight around with companies in their actively managed portfolio.

How it works: From the NYT piece...

  • "BlackRock’s size gives it enormous influence: Mr. Fink can seek to oust directors of companies that he doesn’t believe are heeding his call and he can dump the shares of companies owned by the firm’s actively managed funds."
  • The Times also reports that BlackRock is planning a “heightened-scrutiny model” on climate risk for actively managed funds, including “flagging holdings for potential exit.”

Yes, but: Climate activists have criticized BlackRock's past efforts as often more bark than bite, despite steps like voting against some Exxon board members.

Go deeper