Investment giant BlackRock Inc. (NYSE:BLK) is going green.
The U.S. retail investment firm has announced that it is relinquishing investments with “high sustainability-related risk” as climate concerns drive a sweeping change in the way the world’s largest asset manager invests its $7 trillion U.S. in assets.
“Climate change has become a defining factor in companies’ long-term prospects,” Chief Executive Officer Larry Fink wrote in his annual letter to corporate executives. “Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”
BlackRock has been moving toward a more public stance on climate issues, as activists and non-profit groups increasingly scrutinize the firm’s behavior and voting record on environmental issues.
Non-profit Majority Action analyzed the 2019 proxy voting records of BlackRock and its peer Vanguard Group and found the two firms voted against at least 16 climate-related shareholder proposals where their support could have given the measures majority support.
Fink outlined a number of new initiatives in his letter, including making sustainability integral to portfolio construction and risk management; exiting investments that present a high sustainability-related risk, such as thermal coal producers; launching new investment products that screen fossil fuels, and strengthening the firm’s commitment to sustainability and transparency in its investment stewardship activities.
Earlier in January, BlackRock joined Climate Action 100+, a group of more than 370 investment managers with a combined $41 trillion U.S. in assets. Together with the campaign’s members are pressuring the world’s biggest emitters of greenhouse gases to reduce their environmental impact and disclose more information on how climate change will affect their businesses.