The world’s largest investment company BlackRock shuns fossil fuels as it makes greater efforts to tackle climate change and calls for “a fundamental financing reform”
- BlackRock boss said that every government, every company and every shareholder must act
- City companies are increasingly under pressure to do more about climate change
- CEO Larry Fink will warn ‘a significant redistribution of capital’
- BlackRock provides $ 7 trillion in money for customers around the world
The world’s largest investment manager, BlackRock, has said it will sell its shares in coal companies and other major polluters because it advocated a “fundamental financing reform” to tackle climate change.
Chief Larry Fink warned the boards of directors that they should make more efforts to tackle climate change in his annual letter to business bosses.
Fink said they should take action or face increased anger from investors who are concerned about how unsustainable business practices could reduce their future wealth.
Laurence ‘Larry’ Fink, chief executive of BlackRock, during a panel session at the World Economic Forum in Davos
He said that BlackRock itself, which is responsible for $ 7 trillion of customers’ money, will leave investments that represent a “high sustainability-related risk,” including thermal coal producers.
Fink’s intervention comes at a time when city firms are increasingly under pressure to do more to combat climate change.
Large asset managers such as BlackRock own huge amounts of shares and therefore have a lot of influence on companies, which means that they can influence their business decisions if they want to.
BlackRock and heavyweight colleagues such as Vanguard and State Street have, however, been criticized for not having done enough to guide the companies in which they have invested so far.
“We do not yet know which predictions about climate change will be the most accurate, nor what effects we have not taken into account,” Fink said in the letter. ‘But it is undeniable that we are heading in the right direction. Every government, every company and every shareholder must face climate change. “
BlackRock, which is responsible for $ 7 trillion of customers’ money, is leaving investments that involve a “high sustainability risk”
He further said that climate change questions are “a thorough reassessment of risk and asset values.”
“In the near future – and faster than most expect – there will be a significant redistribution of capital.” Fink added.
The letter also specifically brought BlackRock in line with the objectives set out in the 2016 Paris climate agreement, although this is not the official policy of the United States, which withdrew President Donald Trump from the agreement.