BlackRock, the world’s biggest asset manager, has declared there is no longer any need to shout about net zero in the latest sign of its retreat from so-called woke capitalism.
The firm’s boss, Larry Fink, was previously a vocal advocate of the need for action to address climate change – a stance which caused BlackRock to come under sustained attack from US conservative politicians.
But the asset manager has since signalled a major retreat. Last month, it withdrew from the global Net Zero Asset Managers (NZAM) group, which was committed to the goal of net zero emissions by 2050. It echoes moves by a series of big US lenders which have pulled out of a similar net zero alliance for banks in recent weeks.
In language that is likely to raise the hackles of the green brigade, Rachel Lord, a top British executive at the US-based firm, recently said that being ‘vocal and loud’ on the topic was no longer necessary.
She added of NZAM: ‘Many people are stepping away from that because it’s served its purpose of raising the topic and creating profile around the topic.
‘No one can say now that you need to do that.’
Re-Fink: The New York-based boss of BlackRock was previously a vocal advocate for action on climate change
It is a far cry from Fink’s rallying call five years ago when, in his closely-read annual letter to chief executives, he declared that climate change ‘has become a defining factor in companies’ long-term prospects’ and that ‘we are on the edge of a fundamental reshaping of finance’.
BlackRock was savaged for its advocacy of green issues by Republican politicians in the US, who claimed the firm was trying to push a political agenda. It even became the subject of an investment boycott in Texas.
Fink has since tried to defuse the controversy, saying in 2023 that the firm would no longer use the catch-all ESG (‘environmental, social and governance’) standards label as it had become ‘weaponised’. At the World Economic Forum last month, Lord explained the change of approach.
‘We were very vocal and loud on this a few years ago because the world was quite quiet,’ she said.
‘It’s not quiet on this topic any more so we don’t need to be vocal and loud on it.
‘We always do what our clients want us to do. When clients want to invest in sustainable strategies we are here to provide what they need.
‘We also have clients that don’t want to invest in that, and it’s not our job to tell people what they should and shouldn’t invest in. So they will invest in the things they want to invest in.’
Lord, one of BlackRock’s most senior executives, also told delegates at the summit in the Swiss resort of Davos: ‘We have decarbonisation strategies in the infrastructure space and also have oil and gas energy strategies that we invest in for clients. Those things are not inconsistent. It’s all about ‘are we meeting clients’ needs?’
BlackRock now manages more than $1 trillion of assets in ‘sustainable strategies’, Lord said, exceeding a target to reach that level by 2030.
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