BlackRock abandons the fight against Climate Change after Trump’s election

BlackRock has become the latest financial firm to withdraw from a major climate change group, in the wake of Donald Trump's election as US president and increased regulatory scrutiny . The news was reported by the Financial Times .

The world's largest money manager told institutional clients in a letter on Thursday that it had left Net Zero Asset Managers, (NZAM) a global group that describes itself as committed to achieving "net zero greenhouse gas emissions by 2050 or earlier."

Joining NZAM has “caused confusion about BlackRock 's practices and subjected us to legal investigations by various public officials,” Vice President Philipp Hildebrand wrote, according to a copy of the letter seen by the Financial Times. In short, profit and decarbonisation cannot be pursued together, either one wins or the other wins.

Now all six major US banks, JPMorgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs, have abandoned a similar group of banks, the Net-Zero Banking Alliance, in recent weeks.

Since taking a stance in 2020 that “climate risk is investment risk,” BlackRock has come under intense attack from conservative US politicians. They have launched lawsuits, regulatory investigations and boycotts, alleging that the $11.5 billion money manager is using its large holdings to push climate activism and other forms of “wild capitalism” on American companies.

Late last year, 11 Republican-led states sued BlackRock , Vanguard and State Street, alleging they had conspired to limit coal supplies and promote a “destructive and politicized environmental agenda.” Federal banking and energy regulators have also launched investigations into whether large money managers meet regulatory requirements to act as passive investors.

At the same time, progressive groups have increasingly criticized fund managers' position that clients' financial interests must take precedence unless investors have specifically asked for sustainability to be prioritized.

BlackRock's support for shareholder proposals on environmental and social issues fell from 47% in 2021 to 4% last year. In the end, clients who entrust their money to BlackRock for management, incredibly, want to make profits.

Vanguard left NZAM more than a year ago, while State Street remains a member. Bond giant Pimco and Goldman Sachs' asset management arm never signed on.

In the letter, BlackRock says its exit from NZAM “does not change how we develop products and solutions for clients or how we manage their portfolios.” BlackRock's active portfolio managers continue to evaluate material climate-related risks, alongside other investment risks."

The article BlackRock abandons the fight against Climate Change after Trump's election comes from Economic Scenarios .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/blackrock-abbandona-la-lotta-al-cambiamento-climatico-dopo-lelezione-di-trump/ on Fri, 10 Jan 2025 09:00:13 +0000.