Eye on the Amazon

If BlackRock Has a Purpose, It's Not Confronting Climate Change

Climate leaders don't invest in companies that violate human rights, destroy tropical forests, and cause catastrophic climate change.

On Wednesday, we got some incredible news: the CEO of the world's largest investment firm announced he was radically shifting the company's priorities, including moving money out of fossil fuels because they cause climate change and pressuring the companies it owns to align with the goals of the Paris Climate Agreement. HUGE news for the fight to save the world!

Yet soon our cheers turned to sighs: the letter was a hoax, created by the culture-jamming artists known as the Yes Men. A clever deception that mimicked the BlackRock CEO's annual letter to the CEOs of companies in which the company invests, but a fake nonetheless.

Then, incredibly, CEO Larry Fink released his real letter the very next day! But unlike the hoax letter, it was a major letdown. Despite the worldwide climate crisis, Fink didn't mention "climate change" once in his 2,000-word missive.

What he did write about extensively was "purpose": companies, he wrote, should define their purpose and pursue it alongside profits in order to help "address pressing social and economic issues."

I don't know about you, but the 12-year window we have to turn this global ship around and save the climate seems like a pretty pressing social and economic issue to me. And in case you need a reminder, research continues to show that our only hope of stopping runaway climate change is by ending our use of fossil fuels. But Mr. Fink doesn't seem particularly worried about that.

After all, despite the principles Fink has laid out in this and previous years' letters, BlackRock continues to hold more shares in the industries driving the climate crisis than any other investor in the world. BlackRock is the largest investor in new coal plant development worldwide, one of the largest investors in oil and gas companies, and the largest US investor in rainforest destruction.

Not only has BlackRock refused to divest from destructive industries, it has also failed to use its influence for good. BlackRock consistently votes against shareholder climate proposals and has an even worse track record than other large global asset managers. A 50/50 Climate Project analysis of 2018 shareholder votes found that BlackRock supported only 23 percent of proposals related to addressing climate change.

And while it launched a suite of "sustainable" funds late last year, keep using air quotes when you think sustainable: the funds include commodity traders linked to Amazon deforestation, one of the world's largest coal companies, and companies behind the infamous TransMountain and Line 5 pipelines.

Meanwhile, indigenous peoples in the Amazon and around the world are risking life and limb to defend their ancestral territories and our global climate from deforestation, oil drilling, and pipeline construction.

Lofty statements about "social purpose" are vastly insufficient from an investment firm that wields so much influence (it manages nearly six trillion dollars!). Larry Fink can't be Wall Street's conscience while his company funds the death of our shared future. Real leaders don't invest in companies that violate human rights, destroy tropical forests, and cause catastrophic climate change.

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