(Oil Price) – BlackRock, the world’s largest asset manager, is quitting the Net Zero Asset Managers initiative in the latest exit of a major financial institution from a climate finance alliance since Donald Trump was elected U.S. President in November.
BlackRock has decided to leave the voluntary Net Zero Asset Managers initiative, which launched in December 2020 and aims to “support the asset management industry to commit to a goal of net zero emissions in order to mitigate financial risk and to maximize long-term value of assets.”
The world’s top asset manager has quit the initiative because its membership has “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials,” Vice Chairman Philipp Hildebrand wrote in a letter to institutional clients seen by the Financial Times.
BlackRock assured its clients that the exit from the initiative “does not change the way we develop products and solutions for clients or how we manage their portfolios. BlackRock’s active portfolio managers continue to assess material climate-related risks, alongside other investment risks.”
BlackRock and major banks have come under increased pressure from Republican politicians and Republican-governed states over their pledges to scale back funding for fossil fuel projects.
Texas authorities, for example, have decided to withdraw $8.5 billion in assets of the Permanent School Fund from the asset manager. The Texas legislature passed a law in 2021 to penalize financial firms that, according to state authorities, discriminate against energy companies.
At the end of November, a group of Republican states led by Texas sued BlackRock and fellow asset managers Vanguard and State Street, for alleged violation of antitrust laws. The states allege that the asset managers have been pressuring coal firms to lower output to cut emissions, thus driving up electricity prices in America.
In pulling out of the Net Zero Asset Managers initiative, BlackRock became the latest major Wall Street financier to exit such groups.
Since early December, the biggest U.S. banks – Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and JP Morgan – have all quit the Net-Zero Banking Alliance (NZBA), a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
By Tsvetana Paraskova for Oilprice.com
