BlackRock looks like even more of a climate laggard now as the $450B asset manager divests its active funds from coal.
BNP Paribas Asset Management, with more than $450 billion in assets, has just gone where very few major asset managers have dared to go: it is divesting its actively managed funds from coal – specifically any company that derives more than 10% of its revenue from thermal coal mining.
This ten percent threshold is among the most ambitious divestment commitments to date -- most European insurers that have committed to divestment adopting a threshold of 30%. BNP Paribas’s decision will effectively jettison $1 billion form the coal industry.
U.S.-based asset managers, including BlackRock, State Street and Vanguard, are now clear climate laggards as their European counterparts move forward with aggressive climate policies. BlackRock’s Big Problem campaign highlights the fact that the largest asset manager in the world is also the leading investor in new coal plant development worldwide, as well as one of the largest investors in global oil and gas, and rainforest destruction – the second top driver of runaway climate change. We call on BlackRock to immediately divest its active fund holdings from coal, and, further, to offer fossil free options in its passive portfolio as the default for its clients.
To do so makes good business sense: Research from the Institute for Energy Economics and Financial Analysis is clear that fossil fuel stocks are underperforming and volatile, finishing dead last as a sector of the S&P 500 in 2018. Investors are losing money now: In just one example, the New York State Common Retirement Fund left $22 billion on the table – or about $20,000 per pensioner – by not divesting from fossil fuels a decade ago according to an analysis by Corporate Knights. In light of these losses, why do fund managers continue to coddle a declining industry? Investors deserve an answer to this basic question.
As the largest asset manager in the world, BlackRock has the power to help capitalize the clean energy transition in line with Paris climate goals. Nothing short of a wholesale transformation of our energy systems is needed now. If BlackRock CEO Larry Fink is serious about social purpose, he should start by distancing his company from the fossil fuel industry whose only purpose is to cook the people and the planet.