BlackRock's Fink Urges Companies to Disclose, Do More on Greenhouse-Gas Emissions
By Dawn Lim
BlackRock Inc. Chief Executive Larry Fink asked companies to
disclose more information on how they were moving to reduce
greenhouse-gas emissions, stepping up the company's environmental
efforts from a few years ago.
Mr. Fink said he was focused on the issue because of the risk
climate change poses on investor returns, as well as potential
policy pressures. He urged companies to make clear how they were
preparing for a global regime focused on "net zero" goals to emit
no more carbon dioxide than it removes from the atmosphere by 2050,
a priority in line with the Paris climate accord.
One of President Biden's first acts in office was getting the
U.S. to rejoin the climate accord, signaling the administration's
heightened focus on companies' carbon footprint. Some regulators
said that climate risks's effects on the financial system need to
be better understood.
"Better sustainability disclosures are in companies' as well as
investors' own interests," Mr. Fink said in a letter released to
chief executives of companies Tuesday. "I urge companies to move
quickly to issue them rather than waiting for regulators to impose
The company told clients it would flag companies that posed
significant climate risk for potential selling from its
actively-managed portfolios. It also planned to publish the
proportion of its assets "aligned to net zero" and goals on that
metric going forward.
Best known for funds that trade on exchanges and mirror markets,
BlackRock is the world's largest money manager with $8.7 trillion
in assets. The firm has a high profile perch as a corporate
watchdog, but BlackRock can't just sell out of specific companies
at will when investors task it to track indexes. It has to turn to
other ways to nudge companies.
Mr. Fink's letter is one way for BlackRock to try to amplify its
voice as a shareholder for companies the firm's funds invest
He has become a flagbearer of the idea that companies can't
sustain profits unless they can account for the needs of workers,
the public and society at large. The idea is now a popular mantra.
In a sign of the times, business leaders are increasingly
emboldened to use their perch atop major companies to weigh in on
Some companies have complained Mr. Fink is overreaching and
BlackRock attracted criticism from environmental advocates who
want BlackRock to go further to advance green causes. The company
has been criticized by activists for being soft on management and
not supporting enough shareholder proposals that could spur change.
In late 2020, BlackRock signaled it would be more willing to
consider voting in favor of shareholder proposals that address
material business risks.
"No issue ranks higher than climate change on our clients' lists
of priorities. They ask us about it nearly every day," Mr. Fink
said in his letter this week.
Each year, Mr. Fink writes a letter to other chief executives,
often timed to go public around World Economic Forum annual
The letters dovetail with a business priority: building its
brand around encouraging more corporate disclosure on environmental
and social issues. The company has been expanding its line up of
funds branded around sustainability and aggressively looking to
capture market share in a lucrative, growing part of the investment
industry. BlackRock aims to grow the roughly $200 billion it
manages today in sustainability-themed strategies to $1 trillion by
2030. It's been adding to technology capabilities to help clients
assess investment risks from climate change.
Mr. Fink said the coronavirus pandemic presented an existential
crisis that would prompt more to consider how climate change would
alter lives. A world energy transition that protects livelihoods
"can only be accomplished with leadership, coordination, and
support at every level of government, working in partnership with
the private sector to maximize prosperity," Mr. Fink added.
(END) Dow Jones Newswires
January 26, 2021 09:31 ET (14:31 GMT)
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