Eye on the Amazon

Pressure from Climate Campaigners Forces BlackRock to Prioritize Sustainability in Its Investments

Photo credit: Amazon Watch

In direct response to our campaign demands, BlackRock – the largest asset management company and the largest investor in fossil fuel industries worldwide – publicly committed to "fundamentally reshape finance to deal with climate change."

On January 14th in his annual letter to the industry and shareholders, BlackRock's CEO Larry Fink outlined significant new policy commitments for the company, including an intention to divest from coal and hold the companies they finance to a new standard of environmental sustainability. As an asset management company that controls over $7.4 trillion USD of capital, BlackRock wields a powerful influence over the role financial actors have in addressing climate change. This is a hard-fought victory and just the beginning of our influence over how the company invests its money.

This announcement comes following sustained campaigning by BlackRock's Big Problem, a coalition that Amazon Watch helped launch in 2018 along with ally organizations like Sierra Club and the Sunrise Project, as well as pressure from activists who have long criticized the company for its major role in financing environmental destruction and climate change. Among other demands, we call for BlackRock to divest from fossil fuel companies, push the companies it controls to align with the Paris Climate Agreement standards, and use its status as the industry leader to compel other investors to follow suit.

Amazon Watch has played a key role in holding BlackRock accountable. Last May, we accompanied Eloy Terena, an indigenous leader and legal counsel from Brazil's National Indigenous Movement (APIB), to BlackRock's annual shareholder meeting where Eloy told BlackRock's CEO, "You bear responsibility for our future." In September, we partnered with allies to deliver a follow-up letter from APIB to BlackRock's headquarters in New York City, along with a petition signed by hundreds of thousands of people worldwide calling on the company to stop investing in Amazon destruction.

Through the BlackRock's Big Problem campaign, we held numerous international actions highlighting the environmental destruction and violations of human rights funded by BlackRock. Back then, we were blocked by security personnel when we attempted to deliver our message to company representatives. Now, BlackRock is calling us directly, seeking feedback and recommendations on the policies laid out in Fink's letter. We are a rising tide of pressure, and we're part of the reason that climate inaction is no longer an option for financiers like BlackRock.

BlackRock has a dirty track record when it comes to protecting the climate, and it has invested heavily in the two largest drivers of climate change: fossil fuels and deforestation. According to a report from InfluenceMap, BlackRock's total 2018 holdings in coal, oil, and gas reserves corresponded to about 30% of total CO2 emissions released worldwide per year. In a report released by Amazon Watch in conjunction with Friends of the Earth US and Profundo in August 2019, we outlined the ways that BlackRock has actually increased its investments in the beef and soy industries driving Amazon deforestation in recent years. BlackRock is a majority shareholder (meaning it controls over 5% of all available shares, and thereby has significant influence over corporate governance decisions) in ADM and Bunge, two of the leading soy trading companies carrying out devastating deforestation operations in Brazil.

BlackRock's recent announcement is a promising first step in a more responsible direction towards addressing climate change. In two letters titled "Sustainability as BlackRock's New Standard for Investing" (one addressed to clients and another to CEOs), CEO Larry Fink outlined a series of new policies aimed at promoting environmental sustainability. Among them is a commitment to eliminate all investments from companies that attribute 25% or more of their revenue to thermal coal production, a promise to more thoroughly review and expand BlackRock's offering of ESG (Environmental, Social and Governance) stocks, and a requirement that companies provide a clear analysis of their business model's capacity to address the risks associated with climate change. Fink also indicated that BlackRock would use its majority shareholder status to lead polluting industries to make more environmentally sustainable decisions. The closest that BlackRock comes to mentioning anything remotely related to concern for indigenous communities' rights is a comment from the company's head of sustainability Brian Deese acknowledging the need for investees to verify that they have "social license" to operate.

The announcement fails to include deadlines and leaves several other unanswered questions. How exactly does BlackRock define "sustainability" and what is the precise timeline for the rollout of the changes mentioned? Divesting from coal (which is already a dying industry) is a good start, but what is BlackRock doing to reduce other activities contributing to climate change like deforestation? What about protecting indigenous peoples' rights? How will the company use its lobbying power and financial influence to pressure legislators and leaders for more sustainable environmental regulations around the world? Maintaining pressure on BlackRock to present concrete plans about its sustainability shift will have monumental long-term effects on the future health of the planet.

As we celebrate this win, we are also using this momentum to hold accountable any and all industries that are responsible for accelerating the climate crisis. At the beginning of January, a coalition of environmental, youth, and indigenous-led organizations launched a new campaign called Stop the Money Pipeline. Together, we will target banks, insurance companies, and asset management companies like BlackRock and demand that they stop financing fossil fuel extraction and deforestation and start prioritizing human rights, indigenous autonomy, and climate justice. With mounting pressure, these institutions not only risk their bottom line, but also their reputations as global leaders.

The announcement from BlackRock is encouraging and a testament to the power of grassroots organizing. The only option left on the table for finance giants is to use their power for good and divest completely from the industries that are driving climate change.

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