As usual, <\/b>Larry Fink\u2019s annual letter<\/b><\/a><\/span> to its clients gives a strong indication of BlackRock\u2019s direction of travel. It\u2019s not at all encouraging. The 2023 edition published on March 15th confirms that BlackRock will not act consistently in favor of addressing long-term issues including the climate crisis.\u00a0<\/b>As BlackRock was among protesters’ targets yesterday in Vienna ahead of the European gas conference, Reclaim Finance calls on BlackRock\u2019s clients, especially the many European pension funds with climate targets, to review their mandates and find other asset managers that are serious about driving stewardship and investments to accelerate the transition.<\/span><\/strong><\/p>\n<\/div> When Larry Fink paints gas as a bridging fuel (1),<\/b> he misrepresents the facts and fails to provide his clients with the information they need to identify their long term interests<\/b>. The IEA projected in its 1.5\u00b0C scenario the end of the development of new gas fields and LNG terminals in order to reduce gas production by 22% by 2030. Mr. Fink must tailor BlackRock\u2019s investment choices accordingly. This letter is the last example of many public statements by BlackRock propagating a misguided view of climate issues (2).<\/b><\/p>\n By insisting in his letter that \u201c<\/i>it is not the role of an asset manager like BlackRock to engineer a particular outcome in the economy\u201d<\/i>, Fink is clear that BlackRock will always agree to invest its clients money in the fossil fuel developers that increase long-term systemic risks. When he urges people to invest for their retirements but stands ready to invest their pensions into companies destroying their future, Fink does not have the long term interest of his clients in mind<\/b>. Such investments threaten the fundamental interests of clients: they worsen the climate crisis which in turn increases financial risks related to climate and threatens our living conditions. It\u2019s time to choose: Blackrock cannot aspire to be the \u2018world\u2019s leading expert\u2019 in net zero while massively supporting fossil fuel expansion<\/b> (3) including via its voting advice.<\/b><\/p>\n Larry Fink touts the merits of BlackRock\u2019s \u201cvoting choice\u201d program. But such new tools, that allow more of its clients to cast their votes, must not sideline the fact that an asset manager\u2019s default engagement positions and voting decisions remain key<\/b>. As most asset owners won\u2019t have time or resources to provide their own votes for most companies, they will trust BlackRock to vote on their behalf, meaning that companies will remain primarily influenced by BlackRock\u2019s default positions. Therefore BlackRock\u2019s default voting positions are the heart of the issue and the buck should not be passed to its clients. And while BlackRock might have improved its voting decisions in 2020 and 2021 (e.g. by backing more climate shareholder resolutions), this did not last long as the 2022 AGM season confirmed\u00a0 and even showed the<\/b> backward steps<\/b><\/a><\/span> BlackRock has taken<\/b> (4).<\/p>\n<\/div> Many European pension funds, such a<\/b>s Scottish Widows, PensionDanmark or FRR (5),<\/b> are BlackRock clients.<\/b> If they have the long term interest of their clients in mind, they must ensure their asset managers\u2019 actions and public discourse help encourage the development of the policy frameworks and economic incentives that are needed to create the systemic shifts that would limit warming to 1.5\u00b0C (6). They should also ensure, as a minimum, that their asset managers don\u2019t slow or obstruct the transition. Unlike a growing number of European asset managers, BlackRock still invests <\/a><\/span>without any restrictions in companies that develop new coal mining and power plant projects and still fully backs the management of such companies, like Glencore (7), through its voting. And its stewardship activities also slow down the transition: Blackrock voted against corporate action to report on and align lobby activities on climate and related topics at several companies in 2022 (8).<\/p>\n<\/div> The clear conclusion is that Blackrock has failed to withstand political pressure from fossil fuel interests in the US, and so asset owners cannot rely on Blackrock to help them meet their climate targets. They should give Blackrock a clear deadline to shape up and take a stronger stance against fossil fuel expansion, or lose them as a client.\u00a0<\/b><\/p>\n<\/div>BlackRock is neglecting systemic climate risks, and asset owners\u2019 interests<\/h2><\/span>
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BlackRock\u2019s European clients endanger citizens pensions<\/h2><\/span>