BLK BlackRock Inc

By Dieter Holger

BlackRock Inc. (BLK), the world's largest money manager, lost its clients an estimated $90 billion over the last decade because of its investments in fossil fuels, alleges a report from the Institute for Energy Economics and Financial Analysis.

The IEEFA report, published on Thursday, said that BlackRock's funds have put clients' money in fossil fuel-dependent companies instead of making investments like renewable energy, which would have generated more value.

IEEFA said that 75% of the alleged losses come from its investments in four energy titans, which have underperformed the market in the last 10 years: Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), Royal Dutch Shell PLC (RDSA) and BP PLC (BP).

The companies didn't immediately respond to a request for comment.

The findings fuel the growing movement calling on BlackRock to divest from fossil fuels and spur the growth of clean energy to combat climate change.

A BlackRock spokesman called the report's claims "misplaced," pointing to how the money manager is a passive investing giant.

BlackRock, which managed $6.84 trillion as of June, mostly handles money in funds that track stock market indexes like the S&P 500, according to its second-quarter earnings. It actively picked stocks, bonds and other securities for only around 27% of its managed assets last quarter.

Tom Sanzillo, co-author of the IEEFA report and a former deputy comptroller for New York, said that BlackRock "is not a passive player in the capital markets" in response to the money manager's defense.

"BlackRock is a large consumer of index funds, a direct investor and a thought leader," he said.

The BlackRock spokesman said the company also offers clients funds focused on the environmental, social and governance performance of companies. It manages more than $50 billion in dedicated ESG strategies, representing around 0.8% of its assets, according to its 2018 annual report, but its most recent earnings statement didn't mention ESG.

"These portfolios are among our fastest-growing, which reflects clients choosing to move in that direction," the BlackRock spokesman said.

Write to Dieter Holger at dieter.holger@dowjones.com; @dieterholger

(END) Dow Jones Newswires

August 01, 2019 06:33 ET (10:33 GMT)

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