Is BlackRock Going Green or Just Greenwashing?

Serious money can be made by getting out of companies that contribute to climate change.

BlackRock offices in New York City.Erik McGregor/Getty

This piece was originally published in the Bulletin of Atomic Scientists and appears here as part of our Climate Desk Partnership.

On Tuesday, January 14, the New York Times ran a story in its “Dealbook” business section that contained some startling news. Larry Fink, the founder and chief executive officer of the world’s largest asset manager, BlackRock, announced that his firm would fundamentally shift its investing policy to focus on climate change. The idea is for BlackRock—a firm overseeing $7 trillion in investments—to get out of coal and other fossil fuels, which he called a “high sustainability-related risk.” In fact, said the Times, “His [Fink’s] intent is to encourage every company, not just energy firms, to rethink their carbon footprints.”

In his annual newsletter, Fink went into more detail, saying that BlackRock would introduce new funds that shun fossil fuel-oriented stocks, move aggressively to vote against management teams that are not making progress on sustainability, and press companies to disclose plans “for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized.”

In a subsequent interview with the Times, Fink went on to explain that this decision was a bit of enlightened self-interest. We are fiduciaries, he told the newspaper; “Politics isn’t part of this.” Or, as he put it in his closely scrutinized newsletter: “Will cities, for example, be able to afford their infrastructure needs as climate risk reshapes the market for municipal bonds? What will happen to the 30-year mortgage—a key building block of finance—if lenders can’t estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas? What happens to inflation, and in turn interest rates, if the cost of food climbs from drought and flooding?”

Just the fact that the head of the world’s largest investment firm wrote this in his newsletter—and repeated it to the very public forum of the New York Times—has an enormous impact. It will likely affect the calculations of every chief executive officer in a public company affected by climate change. It will make all their attorneys, auditors, and accountants ask their CEOs if climate impacts are correctly reflected in SEC filings.

Of course, there could be a “a touch of greenwashing” here—echoing an earlier observation made by billionaire British hedge fund activist Christopher Hohn, who called the firm’s previous climate efforts “appalling” and “full of greenwash,” according to the Financial Times. Environmental organizations such as Ceres said that BlackRock has some of the worst records when it comes to issues dealing with climate change. Similarly, data collected by ProxyInsight found that BlackRock opposed more than 80 percent of climate change-related motions at fossil fuel companies between 2015 and 2019, The Guardian said.

And Fink made it a point to emphasize that while he intends for BlackRock to consider climate risks, he was not pursuing a complete, across-the-board sale of energy companies that produce fossil fuels. Because of its sheer size, BlackRock would likely remain one of the world’s largest investors in fossil-fuel companies. (The company holds a 6.7 percent stake in Exxon Mobil, 6.9 percent in Chevron, and 6 percent in the mining company Glencore, CNBC reports.)

Still, Fink’s move to transition clients away fossil fuel and toward renewables could put the pressure on some other large financial firms in the United States to make similar moves—including such financial behemoths as JPMorgan Chase, Vanguard, and T. Rowe Price.

Ironically, if Fink had pulled BlackRock funds out of fossil fuels a decade ago, “his clients would have been well-served,” the Times noted. The energy sector gained only two percent in that time frame, while the broader S&P 500 nearly tripled—showing that there can be serious money to be made by getting out of companies that contribute to climate change.

More Mother Jones reporting on Climate Desk

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

AN IMPORTANT UPDATE

We’re falling behind our online fundraising goals and we can’t sustain coming up short on donations month after month. Perhaps you’ve heard? It is impossibly hard in the news business right now, with layoffs intensifying and fancy new startups and funding going kaput.

The crisis facing journalism and democracy isn’t going away anytime soon. And neither is Mother Jones, our readers, or our unique way of doing in-depth reporting that exists to bring about change.

Which is exactly why, despite the challenges we face, we just took a big gulp and joined forces with the Center for Investigative Reporting, a team of ace journalists who create the amazing podcast and public radio show Reveal.

If you can part with even just a few bucks, please help us pick up the pace of donations. We simply can’t afford to keep falling behind on our fundraising targets month after month.

Editor-in-Chief Clara Jeffery said it well to our team recently, and that team 100 percent includes readers like you who make it all possible: “This is a year to prove that we can pull off this merger, grow our audiences and impact, attract more funding and keep growing. More broadly, it’s a year when the very future of both journalism and democracy is on the line. We have to go for every important story, every reader/listener/viewer, and leave it all on the field. I’m very proud of all the hard work that’s gotten us to this moment, and confident that we can meet it.”

Let’s do this. If you can right now, please support Mother Jones and investigative journalism with an urgently needed donation today.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate