The letter sent during Climate Week calls for BlackRock to better align their actions with their climate commitments, and their recognition that climate risk is financial risk.

BlackRock net zero emissions

New York City Comptroller Brad Lander shared a letter to BlackRock, Inc. Chief Executive Officer Larry Fink to express growing concern that BlackRock’s investment actions do not align with its climate commitments, and to request immediate action by BlackRock to address these contradictions. The letter follows BlackRock’s response to the Attorneys General from Arizona, Nebraska, Kentucky, and 16 other states regarding the criticism of their ESG (environmental, social, and governance) policies.

BlackRock is the largest asset manager in the world, and the largest for three of the New York City pension funds (Teachers’ Retirement System, New York City Employees’ Retirement System and the Board of Education Retirement System), managing approximately $43 billion of their investments.
 
The three Systems have set a goal to reach net zero portfolios by 2040 and have taken significant steps to reach that goal. The letter states that the three NYC Funds climate commitments can only be met with the active support of their asset managers, starting with BlackRock.

BlackRock net zero emissions

Somes extracts of the letter

“BlackRock has repeatedly and rightly recognized climate change as an investment risk. In your 2020 letter to CEOs, you name climate change as a “defining factor in companies’ long-term prospects,” and declared your “investment conviction that sustainability- and climate-integrated portfolios can provide better risk-adjusted returns to investors.” Your 2021 letter to CEOs committed to “supporting the goal of net zero greenhouse gas emissions by 2050 or sooner”—in line with BlackRock’s pledge as a signatory to the Net Zero Asset Managers Initiative (NZAMI)—and asked businesses to disclose how they are integrating their own net zero plans into their long-term business strategies.
 
“Unfortunately, despite these repeated proclamations, in its September 6 response to the attorneys general, BlackRock now abdicates responsibility for driving net zero alignment in its own portfolio by saying that it does not ask companies to set specific emissions targets, and that its participation in NZAMI does not mean BlackRock is setting or meeting any net zero targets. BlackRock even goes so far as to tout its continued investment in fossil fuels—without specific net zero targets or commitments or any plan for a phased transition away from the very investments that increase carbon emissions—as somehow a necessary part of a transition to a green economy. A net zero goal that is not backed by a firm commitment to follow through is at odds with the path our economy must take to limit global temperature rise below 1.5°, or even 2.0°C.
 
“The fundamental contradiction between BlackRock’s statements and actions is alarming. BlackRock cannot simultaneously declare that climate risk is a systemic financial risk and argue that BlackRock has no role in mitigating the risks that climate change poses to its investments by supporting decarbonization in the real economy. As a fiduciary cognizant of the risks of inaction, BlackRock must demonstrate a plan to use its position as the world’s largest asset manager, with all the corporate governance responsibilities that go along with that position, to move its portfolio companies to get their businesses in line with a net zero economy.”

BlackRock net zero emissions

The letter requests swift action from BlackRock, and asks the company to:

  1. Publish an implementation plan that makes clear BlackRock’s commitment to achieving net zero greenhouse gas emissions across its entire portfolio, with concrete steps that detail how it intends to reach science-based targets on a specific timeframe, and clear mechanisms to regularly report on Scopes 1, 2, and 3 emissions for all assets in BlackRock’s portfolio.
  2. Provide a detailed approach to keeping fossil fuel reserves in the ground and phasing out high-emitting assets.
  3. Support climate action through transparent corporate engagement that requires disclosure of climate-related lobbying, works to end lending and insurance for new fossil fuel supply projects, and pushes for science-based targets at portfolio companies.

BlackRock net zero emissions

Source: NYC Comptroller