Briefing

BlackRock signs pledge pressuring portfolio companies to curb environmental impact

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The world’s largest fund manager has signed onto Climate Action 100+, an influential initiative that pressures heavy-carbon-emitting companies to reduce their environmental impact. By signing the pact, BlackRock has agreed to press its portfolio companies to reduce greenhouse gas emissions in line with Paris Agreement targets, and disclose how climate change might impact their financial risk. (Financial Times)

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Talking point: BlackRock, which has US$7 trillion in assets under management, has been criticized for lagging its peers in addressing climate risk in its portfolio. The firm has backed relatively few climate-related proposals made by shareholders and has voted against some proposed by Climate Action members. BlackRock’s newfound commitment to the initiative is a significant admission that climate change is a real threat to financial systems, a position that leaders like Mark Carney have been stressing for years by urging investors, governments and companies to disclose their climate-related financial risks. Climate Action 100+ goes a step further by getting companies to actively reduce their environmental impact, not just disclose it.