Briefing

BlackRock making sweeping climate change-focused changes across US$7-trillion portfolio

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The world’s largest asset manager will double the number of ESG exchange-traded funds it offers to 150 and drop firms with over a quarter of revenues from thermal coal from its actively managed portfolios. BlackRock will also vote against management that are not making progress on ESG factors and push firms to disclose how they would operate “under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized.” (The Logic)

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Talking point: BlackRock’s moves follow multiple climate-change protests outside its offices, letters from U.S. Congress members and several analyses showing it has among the worst records on climate-change voting. The Sunrise Project, which was part of the protests, mostly welcomed the changes, saying they would put pressure on similar firms like Vanguard and State Street Global Advisors. The changes come one week after BlackRock signed the Climate Action 100+ pledge, promising to pressure its portfolio companies to do more on climate change. Today’s announcement goes further, laying out sweeping changes for BlackRock’s portfolio and its own operations. The changes were announced in BlackRock CEO Larry Fink’s annual letter, which has driven industry-wide change in the past. In his 2018 missive, Fink called on CEOs to explain their wider social purpose beyond shareholder returns. That helped spark a broader movement, including a 2019 announcement from 181 of the top CEOs in the U.S. that shareholder value was no longer their first priority. In a separate 2018 letter, Fink called for greater action on gun control.