For example, to ensure continuity of affordable energy supplies during the transition, traditional fossil fuels like natural gas will play an important role both for power generation and heating in certain regions, as well as for the production of hydrogen.”īlackRock made its gas strategy clear in December, when it announced a $15.5 billion gas pipeline deal with Saudi Aramco. “We need to pass through shades of brown to shades of green. “The transition to net zero…will not happen overnight,” he writes. Prolonged investment in fossil-fuel companies is necessary and prudent, Fink argues. In the new letter, Fink cautions against divestment in fossil-fuel companies as a climate strategy, arguing that “foresighted companies across a wide range of carbon intensive sectors are transforming their businesses, and their actions are a critical part of decarbonization.” His message extends to oil companies themselves, which are increasingly looking to offload, rather than decommission, polluting assets. BlackRock’s stance on fossil-fuel divestment, climate disclosure But the company has not yet specified those targets (a spokesperson for BlackRock did not return a request for comment). BlackRock’s latest climate disclosure, from September, repeats that commitment.

This commitment is essential, because among BlackRock and other top asset managers, the most carbon-intensive 10% of holdings are responsible for 85% of the portfolio’s emissions, according to the advocacy and research group Universal Owner. 18, doesn’t clear things up.Īt the beginning of 2021, BlackRock published a climate strategy that committed by the end of the year to “announcing an interim target on the proportion of our assets under management that will be aligned to net zero in 2030.” But apart from a 2020 commitment to reduce its holdings of thermal coal mining companies, BlackRock’s actions don’t show much progress toward reducing emissions-and Fink’s 2021 letter, released Jan. In terms of rhetoric, Fink is among the most powerful climate advocates in global finance. For the last few years, Fink’s letter has foregrounded climate change, and made a compelling argument that climate disruption and the transition to clean energy present both a grave risk to carbon-intensive companies and an unprecedented investment opportunity in alternatives. That’s a 15% increase over 2020, driven largely by investors’ growing appetite for exchange-traded funds, of which BlackRock is the top purveyor- especially those that are ostensibly comprised of companies with strong environmental, social, or governance (ESG) ratings.Įvery January, Fink releases a public letter to CEOs, offering a potentially market-moving look at his priorities for the year. 14 that it now controls more than $10 trillion in assets, cementing its lead as the world’s biggest money manager. BlackRock, the asset management firm Fink oversees, announced on Jan. The keys to the global economy are in Larry Fink’s pocket.

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