Reclaim Finance and urgewald have released a report revealing BlackRock’s exposure to coal, on the anniversary of CEO Larry Fink’s commitment to sustainable investing. Research exposes gaping holes in BlackRock’s climate policy, which even allows for investments in expanding coal companies. The report underlines the need for rapid increase in the ambition of BlackRock’s coal policy, ahead of the crucial COP26 summit later this year.
BlackRock Can’t Kick Coal
BlackRock remains a massive investor in coal, with over $85bn of managed assets invested in coal companies. Even worse, investments in coal producers with expansion plans, like Sumitomo or KEPCO, total over $24bn.
BlackRock’s global coal policy affects only 17% of the entire coal industry and ignores the most carbon-intensive part of the industry. Accordingly, BlackRock’s policy allows for investment in 333 publicly listed companies along the coal value chain, according to the Global Coal Exit List. Nor does the policy exclude coal companies with expansion plans.
What’s more, BlackRock’s policy only applies to its actively-managed portfolio. This means that that more than two-thirds of BlackRock’s total assets are passively managed and are not covered by this policy. Concretely, BlackRock can still invest in every single coal company in the world via its index funds.
Elsewhere, the report reveals widespread failures on climate action. There are no exclusion policies whatsoever around oil and gas. BlackRock’s engagement strategy shows similar poor returns: BlackRock voted against 88% of climate resolutions in 2020, a worse record than in 2019.
The report lays out clear demands for BlackRock to improve its climate record, starting with a strict exclusion of all companies with coal expansion plans. Coal free products should become the default choice for clients and become the lead investment products that BlackRock offers.