Sustainability Climate Change

World’s largest investor BlackRock joins climate action investing pact

World’s largest investor BlackRock joins climate action investing pact

Story at a glance

  • BlackRock has been criticized by fellow investors, its clients and activists for failing to live up to its rhetoric on climate change.
  • After months of protests and shareholder resolutions, BlackRock has announced it will join Climate Action 100+, a group of investors seeking to spur corporations to do more to combat climate change.
  • BlackRock has previously voted against resolutions introduced by Climate Action 100+, but the move to join its ranks may signal a renewed commitment to reducing global greenhouse gas emissions on the part of the financial titan.

BlackRock, the world’s largest asset manager, has added its name to an investor initiative aimed at pushing the world’s largest corporate greenhouse gas emitters to take action on climate change. The announcement comes after increasing pressure from 9,000 nuns, public pension funds and activists to do more to fight climate change, the Guardian reports.

The investment pact, called Climate Action 100+, is a group of investors managing funds worth more than $35 trillion — now roughly $41 trillion after the addition of BlackRock’s $6.9 trillion in managed assets — that seeks to pressure companies whose business activities exacerbate climate change to reduce their greenhouse gas emissions. 

BlackRock and its executives have issued statements in the past citing climate change as a crucial issue. But the company, which manages assets from BP, Shell and Exxon Mobil, has voted against various other resolutions brought by Climate Action 100+, drawing protests and accusations of hypocrisy.

The financial giant’s investments in fossil fuel companies total more than $87 billion, making it the largest investor in some of the corporations most responsible for fueling the climate crisis.

But signing onto Climate Action 100+ could signal a major shift in the company’s willingness to throw its weight behind holding the world’s biggest emitters of greenhouse gases such as carbon dioxide accountable. 

“In joining CA100+, BlackRock is responding to the demands of its asset-owner clients and other groups globally that they take meaningful action to address climate change,” Fiona Reynolds, chief executive of UN-backed investment group Principles for Responsible Investment said in a statement.

A spokesperson for BlackRock said: “BlackRock has become a signatory to Climate Action 100+. This is a natural progression of the work our Investment Stewardship team has done to date. 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.”

The company’s move is thought to respond to the mounting criticisms from activists and even other investors to take more substantive actions to combat climate change.

Timothy Smith, director of shareowner engagement on the environment at Boston Trust Walden, told the Guardian that he hoped BlackRock’s joining the climate action group would prompt other asset managers to use their votes to exert more influence on environmental issues such as climate change.