Climate activists taking asset managers to task for aligning business practices and climate positions called out BlackRock on Tuesday for failing what they called its "first big test" of a commitment to vote against directors of companies not doing enough to address global warming.
In January 2021, BlackRock said under new voting criteria that it would hold corporate directors accountable when business plans do not adequately address climate change.
Both BlackRock and Vanguard Group voted in favor of Wells Fargo Chairman Charles H. Noski, who was easily re-elected at the company's annual meeting Tuesday. His election was opposed by the coalition of grassroots groups and sustainable investing advocate BlackRock's Big Problem.
A spokesman for coalition member Sierra Club said Wells Fargo "has fallen significantly behind the curve when it comes to meeting the moment on climate action" and that "BlackRock and Vanguard did not live up to their rhetoric on climate action. We will be monitoring other pivotal shareholder votes closely and hope to see the largest investors step up to hold corporations accountable for their climate failures."
Climate activists are targeting BlackRock as the largest asset manager in the world, whose influence "can make or break climate action," the coalition said. It plans to continue holding demonstrations throughout April near BlackRock offices in New York, San Francisco, Boston, Miami, Boca Raton, Dallas, London and Zurich, and will continue to do so. In London, it has projected onto BlackRock's office a giant eyeball with the message "All Eyes on BlackRock."
Another climate activist investment group, As You Sow, criticized BlackRock for energy holdings in the BlackRock U.S. Carbon Transition Readiness ETF, which broke funding records on its first day.
The problem according to As You Sow, is that the fund holds major oil and gas companies, including Exxon Mobil, Chevron, ConocoPhillips, Marathon Petroleum and Devon Energy; fossil-fuel powered utilities, including Berkshire Hathaway, Consolidated Edison and UGI; and oil field services and pipeline companies, including Kinder Morgan, Baker Hughes and Schlumberger.
"If this ETF is really named 'Carbon Transition Readiness' then I have to ask what we are transitioning to and what we are getting ready for?" said As You Sow CEO Andrew Behar in a statement.
"BlackRock can do better. Investors who bought this fund thinking that the holdings are actively working on climate transition need to take a much closer look," he said. "Based on our analysis, this ETF ignores Larry Fink's statement, 'climate risk is investing risk,' while doubling down on business as usual."
BlackRock initially declined to comment for this story, but after publication a BlackRock spokesman responded with a statement that said, in part, that the ETF is an active ESG strategy designed to be a core U.S. large-cap equity holding, and that it uses proprietary climate analytics to assess “a company's ability to thrive in the transition to a low carbon economy.”
The resulting portfolio has almost 50% less carbon intensity than its Russell 1000 benchmark, the spokesman said.