Jan 10, 2020

The climate spotlight on BlackRock

Illustration: Eniola Odetunde/Axios

Investment giants are becoming increasingly prominent actors — and targets — in battles over corporate climate policy.

What's happening: The behemoth fund manager BlackRock has joined Climate Action 100+, an investor network that pushes fossil fuel companies to make new disclosures and carbon emissions commitments, adding heft to the 3-year-old group, which has already won concessions from companies including Shell, BP and Norwegian oil major Equinor.

  • The group's combined assets under management are now $41 trillion with BlackRock's addition, organizers say. Its hundreds of members include CalPERS, Allianz, and UBS Asset Management, to name a few.

One big question: Whether joining Climate Action 100+ changes BlackRock's asset management policies and voting decisions on climate-related shareholder resolutions, which it has rarely backed.

  • As the Financial Times notes, "BlackRock has voted against shareholder proposals brought about by Climate Action 100+ in the past and is under no obligation to vote for them in the future."

Quick take, per Axios' Felix Salmon: "If this means that BlackRock is going to vote its trillions of dollars worth of shares in support of climate resolutions, that could change corporate governance significantly. But no one yet knows whether it means that."

The other side: BlackRock's addition to Climate Action 100+ happened coincidentally on the same day that activists stepped up pressure on the company with the announcement of the Stop the Money Pipeline campaign, which is pressing banks and fund managers to end financing of fossil fuel projects.

  • BlackRock is among the main targets of the mobilization — whose participants include Greenpeace, the Sierra Club, EarthRights and 350.org — that brings together several existing campaigns.
  • Moira Birss of Amazon Watch and the BlackRock's Big Problem campaign, which is part of the umbrella effort, said they want BlackRock to end coal-related investments and to "prioritize fossil- and deforestation-free funds by making them the default option for all investors and clients."
  • They also want BlackRock to support shareholder resolutions that push energy companies to align their business models with the Paris climate agreement's goals.

What they're saying: BlackRock called joining Climate Action 100+ a "natural progression" of the work its "investment stewardship" team already does with many companies in their passive and active portfolios.

  • "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 said.

Go deeper: The BlackRock affair

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