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Asset manager BlackRock threatens to sell shares in worst climate polluters
World’s biggest investor vows to support net zero carbon pledge amid pressure to divest from fossil fuels
BlackRock, the world’s biggest investment fund manager, has threatened to sell shares in the worst corporate polluters in a bid to support the goal of net zero carbon dioxide emissions by 2050.
Larry Fink, BlackRock’s chief executive, said the investor would ask companies whose shares it holds to disclose their plans to achieve net zero emissions. The new approach is set out in Fink’s annual letter to CEOs around the world. BlackRock could then divest from polluting companies in its actively managed funds – which represent about a tenth of its assets – if they did not improve.
BlackRock has significant influence with companies, investors and governments because of the vast array of shares, bonds and other assets its controls, worth $8.7tn (£6.4tn) at the end of December. Its size makes it a major player in sustainable investment, although only $616bn of its assets, about 7%, are managed with environmental, social or governance criteria taken into account.
BlackRock has faced significant pressure from environmental activists to improve its record on climate action, given its role as the biggest controller of shares and bonds in the world, including vast holdings of fossil fuel companies.
The pledge to support net zero by 2050 brings BlackRock in line with commitments by more than 100 countries around the world, and with some of its big rivals which have already vowed not to invest in companies that pollute by 2050.
BlackRock says it is not its role to force its clients to divest from fossil fuel producers, but it argues that it is making it easier for clients such as pension funds and university endowments to choose environmentally friendly investments rather than support polluters. These included new measures showing “temperature alignment” scores for equity and bond funds, further adding climate risks into its investment processes and launching new funds aligned with the net zero goal.