Does BlackRock Practice What It Preaches for the Social Good?

Firm reportedly has investments in companies funding Amazon drilling

BlackRock CEO Larry Fink caused upheaval in Corporate America recently after asking executives and directors to take environmental, social and governance (ESG) responsibilities seriously or else.

In a letter to company CEOs, Fink warned that BlackRock, which controls $1.7 billion in investments, could choose to sell a corporation's stock if leaders don't make social good part of overall business strategy plans.

"To sustain that performance you must also understand the societal impact of your business as well as the ways that broad, structural trends – from slow wage growth to rising automation to climate change – affect your potential for growth," he wrote.

Turns out, BlackRock may not entirely be practicing what the company is preaching.

A November report by Amazon Watch – a nonprofit that partners with indigenous and environmental groups to further human rights, corporate accountability, and the preservation of the Amazon's ecological systems – found that BlackRock has "significant investments in companies drilling in the Amazon."

When asked about the investments, BlackRock spokesman Curtis Chou said the company could not comment on individual investors or companies, but he provided the following statement.

"The majority of the assets we manage for our clients are held in index funds where we are obligated to replicate the holdings and performance of specific benchmarks, and to hold a stock for as long as the ‘name' is in the benchmark. However, we've incorporated ESG and carbon-specific data into our risk management platform. Our active portfolio managers have access to this information, but they must ultimately execute the decisions they believe will best fulfill their clients' objectives. We also provide clients with sustainable and low-carbon portfolios through our industry-leading sustainable investing platform, and are one of the world's leading investors in renewable power projects."

Amazon Watch and CREDO Action, a progressive activist group, said in a post on the organization's website that the organizations delivered over 120,000 petition signatures to BlackRock's San Francisco headquarters earlier this month, "calling on the asset manager to divest from companies drilling for oil in the Amazon rainforest."

Amazon Watch's Executive Director Leila Salazar-López couldn't be immediately reached, but the post said:

"Statements about climate risk and social purpose are no substitute for this concrete action. Divesting from Amazon crude, with its egregious environmental and human rights implications, is one good place to start."

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