By Anders Lorenzen
The worlds largest investor, New York-based Black Rock, which has faced criticism from activists for not taking enough action on climate change, has after previously voted down several climate change resolutions posed by shareholders, finally changed course.
The company has joined the Climate Action 100+ investor group which is seeking carbon emission cuts.
This development comes after the outgoing governor of the Bank of England, Mark Carney, warned companies that they faced bankruptcy if they did not take action on climate change.
Climate Action 100+ was set up in 2017 and is an influential pressure group calling for the biggest corporate polluters to reduce their carbon emissions. The group manages assets worth more than $35tn.
It is unclear what actions will now be taken by Black Rock which manages assets of some of the world’s largest fossil fuel companies such as BP, Shell and Exxon Mobil. It is unlikely the company will cut those investments, but they could argue that by joining the initiative they’re perfectly placed to influence them to make deep emission cuts. A Black Rock spokesperson said about the move, “evidence of the impact of climate risk on investment portfolios is building rapidly”.
Until now, Black Rock’s effort in taking the climate crisis seriously has been poor at best. They have so far failed to back shareholder resolutions calling for more emissions disclosures or giving details of its specific talks with corporate executives. They have also failed to back previous Climate Action 100+ resolutions. Several activists are said to have welcomed Black Rock’s new direction but are waiting to see what specific actions the asset managers might take.
Climate Action 100+ steering committee member Mindy Lubber said: “With Black Rock’s commitment to the goals of the initiative, we will assuredly see more impactful results in tackling the global climate crisis.” But Mark Campanale, chairman of London-based climate think tank Carbon Tracker was more clear about what the asset manager needs to do now: “BlackRock needs to lend its voice to the many involved in Climate Action 100+ calling for no new investment in expanding fossil fuel production.”
Time will tell how serious Black Rock is about tackling climate change or if this is just a PR exercise. Last month Christopher Hohn, the billionaire hedge fund manager who set up and runs the TCI Fund Management, an activist fund, accused BlackRock of “greenwash” because it does not require emissions disclosures.