Larry Fink has published his annual letter to CEOs, attacking divestment while promoting fossil gas. Reclaim Finance reacts.
Paris, 18th January - BlackRock CEO Larry Fink today released his keenly-awaited annual letter to CEOs for 2022, defending ESG investing as not ‘woke’ or ‘ideological’. This continues a focus on climate issues in recent years, including a net-zero 2050 commitment last year - but campaigners today slammed (1) ‘a failure to tackle the elephant in the room’, with no new announcements made regarding BlackRock’s enormous fossil fuel holdings, which are among the highest in the world of any global institutional investor. Indeed, Fink even praised the role of fossil gas in the transition, arguing that “we need to pass through shades of brown to shades of green”, while also criticizing divestment.
BlackRock has been under sustained fire from NGOs regarding the carbon-intensive companies in its portfolio. Shortly after the asset management giant’s $85bn in coal holdings were revealed in January 2021, BlackRock published a memo targeting the fossil fuel sector, but left the door wide open for shaky net zero targets by fossil fuel companies. Predictably, this was followed by a failed shareholder season. Last month, BlackRock finalized a $15 billion deal with Saudi Aramco to acquire 49% of the oil & gas major’s gas pipeline subsidiary (2). The IEA has been clear that to stay within 1.5°C of warming, we have to stop investing in new fossil fuel infrastructure.
BlackRock recently passed an astonishing $10 trillion of assets under management, and is the top ETF provider in Europe.
Lara Cuvelier, campaigner at Reclaim Finance said: “Larry Fink’s latest letter reveals BlackRock to be more of a hindrance than a help on climate. His opportunistic argument for supporting fossil gas as part of the green transition is flatly contradicted by climate science, not least the IEA’s mandate against new fossil fuel supply projects and the need to decarbonize the entire power sector by 2040 worldwide. Fink is thus providing cover for the building of dozens of new gas plants, which would lock us into fossil fuels for years to come. Moreover, his simplistic attack on divestment obscures a vital lesson: to succeed, engagement must be paired with a clear demand to stop fossil fuel expansion. Given BlackRock’s enormous fossil fuel interests, perhaps this truth is just too inconvenient to stomach.”
Fink also repeated his call for governments to act more quickly on climate, including through regulation. However, BlackRock has faced criticism for its intense lobbying against prescriptive regulation on finance at the European level. “Larry Fink wants climate action, but not too much,” concluded Cuvelier. ENDS
BlackRock has been under sustained fire from NGOs regarding the carbon-intensive companies in its portfolio. Shortly after the asset management giant’s $85bn in coal holdings were revealed in January 2021, BlackRock published a memo targeting the fossil fuel sector, but left the door wide open for shaky net zero targets by fossil fuel companies. Predictably, this was followed by a failed shareholder season. Last month, BlackRock finalized a $15 billion deal with Saudi Aramco to acquire 49% of the oil & gas major’s gas pipeline subsidiary (2). The IEA has been clear that to stay within 1.5°C of warming, we have to stop investing in new fossil fuel infrastructure.
BlackRock recently passed an astonishing $10 trillion of assets under management, and is the top ETF provider in Europe.
Lara Cuvelier, campaigner at Reclaim Finance said: “Larry Fink’s latest letter reveals BlackRock to be more of a hindrance than a help on climate. His opportunistic argument for supporting fossil gas as part of the green transition is flatly contradicted by climate science, not least the IEA’s mandate against new fossil fuel supply projects and the need to decarbonize the entire power sector by 2040 worldwide. Fink is thus providing cover for the building of dozens of new gas plants, which would lock us into fossil fuels for years to come. Moreover, his simplistic attack on divestment obscures a vital lesson: to succeed, engagement must be paired with a clear demand to stop fossil fuel expansion. Given BlackRock’s enormous fossil fuel interests, perhaps this truth is just too inconvenient to stomach.”
Fink also repeated his call for governments to act more quickly on climate, including through regulation. However, BlackRock has faced criticism for its intense lobbying against prescriptive regulation on finance at the European level. “Larry Fink wants climate action, but not too much,” concluded Cuvelier. ENDS
Notes
1) See full reaction and more context from the BlackRock’s Big Problem campaign. A separate letter to investors is expected in the coming weeks, with BlackRock’s 2030 emissions targets due in the coming months.
2) Our deeper analysis of how BlackRock is taking it easy on the fossil fuel industry
1) See full reaction and more context from the BlackRock’s Big Problem campaign. A separate letter to investors is expected in the coming weeks, with BlackRock’s 2030 emissions targets due in the coming months.
2) Our deeper analysis of how BlackRock is taking it easy on the fossil fuel industry
Angus Satow
Campaign Communications
+44(0)7847754046
angus@reclaimfinance.org
Campaign Communications
+44(0)7847754046
angus@reclaimfinance.org