The official in charge of New York City’s public pension funds is pressuring BlackRock Inc.
to commit to achieving net zero emissions across its investment portfolio.
In a letter Wednesday to BlackRock CEO Larry Fink, New York City Comptroller Brad Lander said the asset manager’s voting record in the 2022 proxy season and recent public statements make him concerned that BlackRock is backing down on its climate commitments.
Lander’s letter follows an early August letter from 19 state attorneys general that accused BlackRock of actively pushing companies to phase out fossil fuels to the detriment of local economies that rely heavily on the energy industry.
In response, BlackRock said it does not dictate emissions targets for the companies in which it invests. The company cited its $100 billion investments in Texas energy companies as evidence that it is not boycotting fossil fuels.
“BlackRock is now disclaiming responsibility for driving net zero adjustment on its own portfolio by saying it does not ask companies to set specific targets,” wrote Mr. Countries. BlackRock manages about $43 billion in investments for three New York City pension funds.
BlackRock declined to comment. In its response to the August letter, the company said it has a fiduciary obligation to “identify short- and long-term trends in the global economy that may affect our clients’ investments.”
BlackRock is the world’s largest investor with approximately $8.5 trillion in assets under management. It holds shares in more than 14,000 companies worldwide and votes on proxy proposals on behalf of passive investors.
For years, the company has walked a political tightrope over its stance on climate issues.
“Climate risk is investment risk,” wrote Mr. Fink in his 2020 annual letter. That comment — and others like it — rankled oil and gas industry executives and officials in the states they call home.
Texas Comptroller Glenn Hegar last month included BlackRock on a list of 10 financial firms the state has labeled hostile to energy companies, a move that could prompt state entities to stop doing business with the asset manager.
“We disagree with the Comptroller’s opinion,” a BlackRock spokesman said at the time.
Now BlackRock is facing backlash from officials on the other side of the debate.
Lander, the New York City comptroller, asked BlackRock to publish plans detailing the asset manager’s commitment to achieving net zero. He also asked BlackRock to pressure its portfolio companies to disclose climate-related lobbying and work to end lending and insurance for new fossil fuel supply projects.
He criticized BlackRock’s decision to support fewer climate-related shareholder proposals in the 2022 voting season. BlackRock voted in favor of 24% of environmental and social shareholder proposals in this year’s proxy voting season, down from 43% last year. The firm said the decline was partly due to a crop of “more prescriptive” shareholder proposals.
“The fundamental contradiction between BlackRock’s statements and actions is alarming,” wrote Mr. Countries. “BlackRock cannot simultaneously declare that climate risk is a systemic financial risk and argue that BlackRock has no role in mitigating the risks that climate change poses to its investments by supporting decarbonisation in the real economy.”
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