BlackRock stated that while an "orderly transition" to net-zero by 2050 would "benefit the global economy and our clients," the company cautioned that Russia's invasion of Ukraine was a "stark reminder of the challenges of a just and orderly energy transition," adding that "these events may drive short-term increases in demand for fossil fuels and associated emissions in some regions, while potentially accelerating investments into renewable energy in Europe and other regions where energy security goals are aligned with decarbonization."
BlackRock further explained in its statement that its role in the transition to net-zero is as a "fiduciary to our clients." "Our role is to help them navigate investment risks and opportunities, not to engineer a specific decarbonization outcome in the real economy," the firm added.
However, BlackRock also indicated it expects to remain as "long-term investors in carbon-intensive companies, because they play crucial roles in the economy and in a successful transition," adding that BlackRock does not pursue "broad divestment from sectors and industries as a policy — particularly as a portfolio fully divested of such sectors in the near term may be at odds with enabling an orderly transition to a net-zero economy in the long term."
Some were skeptical about BlackRock's projections.
Lara Cuvelier, sustainable investment manager at Reclaim Finance, a nonprofit organization affiliated with The Friends of the Earth Federation, said in a statement that BlackRock must guarantee that "the bulk of the companies that it invests in have at least halved their overall emissions by 2030." She added that if BlackRock doesn't disclose the concrete and timebound requests made to companies, this announcement is just "another smokescreen."
"The world's largest asset manager cannot get away with vaguely defined commitments," Ms. Cuvelier added. "It must act with urgency, especially with respect to the fossil fuel expansionists in BlackRock's portfolio that are leading us to climate catastrophe. After all, BlackRock today holds $34 billion in companies planning to expand their coal business, such as (Anglo-Swiss multinational commodity trading and mining firm) Glencore."
Similarly, Casey Harrell, senior strategist with the BlackRock's Big Problem Campaign, a global network of nongovernmental organizations and social movements, warned that BlackRock must include "specific targets and emission reduction goals for heavy polluting sectors" and that it must "use every tool in its tool belt to achieve these results, including engagement, voting, investment policy and fund capital allocation."
BlackRock had assets under management of $9.6 trillion in the quarter ended March 31, according to the company's earnings release Wednesday.
