BlackRock CEO Larry Fink published his 2021 letter to its clients (1), focusing for the second year in a row on climate announcements. BlackRock said it will align its portfolio with a net zero economy and will request that investee companies adopt “net zero” compatible business plans. These warm words should not hide the absence of any measures regarding BlackRock massive fossil fuel investments and very weak coal policy (2).

New measures still provide a way out for major polluters

While it is positive that BlackRock has finally recognized its duty to act on companies moving too slowly on climate, there is a large risk that BlackRock will leave this definition of how it considers a climate laggard open. The three criteria outlined to define “significant climate risk” are vague enough for companies to avoid real climate action. It’s a step forward for BlackRock to mention potential exit sanctions for its active portfolios, but these should already be automatic for climate laggards such as coal companies with no credible exit strategies. In the current state of the announcements, it’s unclear what will be required for these major polluters.

Regarding its passive funds, BlackRock promises voting action, but it is important to stress that engagement must be coupled with immediate exclusions for companies with fossil fuel expansion plans. Climate science already demands an immediate start to decreasing fossil fuel production in order to limit warming to 1.5°C (3). We also know since 2015 that our carbon budget does not leave any room for new coal plants. In the meantime, coal developers such as KEPCO can still be part of BlackRock’s portfolios (4).

Shrugging off responsibilities

Furthermore, the tone of the letter this year insists repeatedly on “clients’ choice” and “investors’ personal preferences”, as a way to pass responsibility. The letter indeed does not offer a clear pathway for how BlackRock will decarbonize its portfolios. If serious about its commitment to tackling climate change, BlackRock should apply the necessary exclusions by default. This would not mean rejecting clients’ choices but rather providing the guidance needed to meet its prudential and climate responsibilities.

It’s also worrying that the highlight of the letter is BlackRock’s request to portfolio companies to set up net zero plans. This statement puts all companies in the same basket, and does not prioritize major polluters. Furthermore, it does not provide clear guidelines on what BlackRock considers acceptable for inclusion in its portfolios and thus leaves companies in the dark. The risk of such hazy requests is that it enables BlackRock to not publish clear exclusion policies on the riskiest sectors for the environment and for local communities, such as coal, unconventional oil and gas or deforestation.

Why net zero targets should be taken with a pinch of salt

These pitfalls partly explain why BlackRock’s big net zero speech should be welcomed with a pinch of salt. Another reason is the very definition of “net zero” targets, or carbon neutrality. Achieving carbon neutrality means reducing CO2 emissions and capturing remaining emissions so as to achieve zero emissions by 2050. There is no standard definition or way of setting up such a plan for companies, and no way of verifying that the plans will not widely rely on non existing carbon removal technologies. BlackRock does not indicate which scenario should be used to set up the plans and whether it expects low overshoot scenarios and limited reliance on carbon removal solutions. Thus, there is a risk that BlackRock will keep polluting through its investments while avoiding any short term action.

Major exposure to coal in the meantime

Our research revealed that $85bn of assets managed by BlackRock are still invested in the coal industry (4). Among its investees are some of the biggest coal producers in the world such as Adani, with a shocking $24bn invested in companies that have coal expansion plans, such as Sumitomo or KEPCO. BlackRock’s extremely weak coal commitment covers only 17% of the industry and applies to less than a third of its investments.

Larry Fink’s new net-zero commitment could be a positive step if it were paired with concrete and immediate action to stop investing in new fossil fuels, starting with coal. Let’s hope that with COP26 looming, BlackRock will announce a more ambitious policy and once and for all kick out coal expansionists.

For more detailed analysis on BlackRock’s announcements, the BlackRock Big Problem campaign (a global network pressuring asset managers like BlackRock) full analysis can be found here. The network statement is here.


1) Link to Larry Fink’s letter to clients here and letter to CEOs here.

2) BlackRock current coal exclusion criteria can be found here and our analysis here.

3) The UNEP Production Gap Report shows that between 2020 and 2030, global coal, oil, and gas production would have to decline annually by 11%, 4%, and 3%, respectively, to be consistent with a 1.5°C pathway.

4) Based on financial research outlined in our report “One year on: BlackRock still addicted to fossil fuels” published on January 13th, 2021.