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BlackRock has been accused of jeopardizing investors' liquidity by ignoring the "serious financial risks" of climate change, according to a report that says the inaction of the world's largest fund manager has cost tens of billions of dollars. dollars to its customers.
The 92-page report by the Institute for Energy Economics and Financial Analysis, a think tank supported by environmental foundations, criticized the fund manager for $ 6.8 million, saying that despite public proclamations on the risk of climate change, BlackRock had not taken concerted action. .
Tim Buckley, one of the authors of the report and former head of equity research at Citigroup, said BlackRock, as the largest investor in the world, plays a vital role in the fight against climate change.
"If BlackRock moves [on climate change]everyone in the market will stand up and listen. I think it's incumbent upon Larry Fink, who created this huge financial company, to defend his own rhetoric, "he said.
BlackRock argued in 2016 that investors needed to act urgently to protect portfolios from the effects of climate change, while Mr Fink urged business leaders, in his annual letter, to pay attention to environmental issues in 2018.
Despite this, IEEEFA's badysis revealed that BlackRock had lost more than $ 90 billion of investors in "value destruction and opportunity costs" in a few holdings over the past year. the last decade, mainly due to neglect of global climate risk. Three-quarters of this loss concerns only four companies – ExxonMobil, Chevron, Royal Dutch Shell and BP – which, according to the report, have all underperformed the market over the last decade.
The research stated that BlackRock's board of directors had a conflict of interest as several directors were related to the fossil fuel sector. Pamela Daley, former Senior Vice President of General Electric, and Murry Gerber, Director of Halliburton, one of the largest oilfield services companies in the world.
BlackRock has also been criticized for taking a stand against fossil fuel companies in camera rather than criticizing them publicly at annual meetings. He accused BlackRock of not supporting climate change resolutions at shareholder meetings.
BlackRock stated that most of its shares were held by its pbadive arm, which invests in chasing stock baskets rather than actively choosing stocks.
"Index providers determine which companies to include in the indices they create based on the index methodology. The findings of this report are therefore misplaced, "said the company.
"We offer our clients a variety of product choices, including portfolios focused on ESG factors. These portfolios are part of our fastest growth, reflecting the customers who have chosen to move in this direction, "he added.
Buckley dismissed claims that BlackRock had little control over its pbadive arm, arguing that other major index investors were taking tougher action to tackle climate change. This includes Legal & General Investment Management, a leading index manager who has started selling shares such as ExxonMobil in some of its funds or voting against companies or directors at shareholder meetings in other funds.
Buckley said BlackRock could take a number of steps to protect investors, including dumping the companies that emit the biggest carbon emissions from its core index funds. It could also offer high-carbon indices to investors who want to be exposed to these stocks.
"BlackRock has the fiduciary duty, even to pbadive investors, to invest in the long term. Blackrock's own research indicates that this is a real risk, and screening [some fossil fuel stocks] would not hurt long-term returns, so why not do it? "
Tom Sanzillo, co-author of the IEEFA report and former deputy first controller of the State of New York, added: "Win or lose, profit or loss, a responsible trustee poses difficult and clear questions. BlackRock does not ask or worse, he mumbles. "
BlackRock has faced a wave of criticism of its position on climate change in recent years.
In January, a group of responsible investment activists wrote to Mr Fink asking him to be tougher on climate change with regard to the companies he invests in.
The same month, environmental activists targeted the company with a complex hoax involving a parody letter supposed to be written by Mr. Fink, which was sent to the media, while activists also targeted the annual meeting of New York society.
It is feared that climate change will quickly change industries, whether through physical, regulatory or consumer changes. A study conducted in 2015, used to estimate the global total stock of manageable badets threatened due to climate change, estimated that losses could range from $ 4.2 billion to $ 43 billion by the end of the year. century.
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