New York City Comptroller Brad Lander has "growing concern" that BlackRock's investment actions do not align with its climate commitments, the fiduciary for the $239.5 billion New York City Retirement Systems said in a letter to BlackRock CEO Larry Fink on Wednesday.
BlackRock is the largest asset manager for three of the New York City pension funds - Teachers' Retirement System, New York City Employees' Retirement System and the Board of Education Retirement System – and manages approximately $43 billion as of Aug. 31.
Those three systems have set a goal to reach net-zero portfolios by 2040. "We cannot achieve that goal without the active alignment of our asset managers, beginning with BlackRock, as our largest manager," Mr. Lander said in the letter.
Despite "repeated proclamations" supporting net-zero goals, BlackRock "now abdicates responsibility for driving net zero alignment in its own portfolio," Mr. Lander wrote, based on the asset manager's Sept. 6 response to 19 Republican attorneys general who questioned BlackRock's ESG activity.
Mr. Lander said that BlackRock is abdicating responsibility because it told the attorneys generals that it does not ask companies to set specific emissions targets, and it continues to invest in fossil fuels without specific net-zero targets or commitments.
The letter requests "swift action" from BlackRock on three requests: publish an implementation plan clarifying its commitment to achieving net-zero greenhouse gas emissions across its entire portfolio, including concrete steps for reaching science-based targets over a specific time frame; provide a detailed approach to limiting fossil fuels and phasing out high-emitting assets; and support climate action through corporate engagement, lobbying disclosure, ending fossil fuel lending and pushing portfolio companies to have science-based targets.
A BlackRock spokesman declined to comment on the comptroller's letter. He referred to a net-zero statement that its role in the net-zero transition is as a fiduciary to its clients, helping them navigate investment risks and opportunities, "not to engineer a specific decarbonization outcome in the real economy."
As the net-zero transition proceeds, "we anticipate that by 2030, at least 75% of BlackRock corporate and sovereign assets managed on behalf of clients will be invested in issuers with science-based targets or equivalent," the statement said.