As reported on Business Insider:
- BlackRock’s CEO Larry Fink wrote a letter to corporate leaders Tuesday pressing them to disclose concrete climate change plans.
- Companies’ plans should help eliminate net greenhouse gas emissions by 2050, Fink wrote.
- "I urge companies to move quickly to issue them rather than waiting for regulators to impose them," he said.
- Visit Business Insider’s homepage for more stories.
BlackRock founder Larry Fink on Tuesday morning pushed CEOs around the world to publish plans for reaching net-zero greenhouse gas emissions by 2050.
In a letter he sends annually, Fink called on companies to "disclose a plan for how their business model will be compatible with a net zero economy," defined as limiting global warming to well below 2 degrees Celsius and eliminating net greenhouse gas emissions by 2050.
"We expect you to disclose how this plan is incorporated into your long-term strategy and reviewed by your board of directors," he wrote to corporate leaders.
BlackRock, the world’s biggest asset management firm, would change its investment process via a "heightened-scrutiny model" for managing holdings that pose a climate risk, Fink said.
Read more: Larry Fink, CEO of the world’s largest money manager, pushes back on the notion that firms like his aren’t heavily regulated – says the idea ‘must be coming from bankers’
The firm will also publish "a temperature alignment metric for our public equity and bond funds" and will launch products "with explicit temperature alignment goals, including products aligned to a net-zero pathway," he wrote.
Fink has faced criticism over his comments on climate change – a report from Reclaim Finance published January 13 revealed that BlackRock holds at least $85 billion in investments in coal companies. "If Larry Fink is serious about climate action, BlackRock must stop joking around coal," the report said.
BlackRock didn’t immediately respond to a request for comment.
Fink is able to remove directors from firms that he believes aren’t following his agenda and can ditch shares owned by his firm’s actively managed funds, the New York Times reported.
In 2020, BlackRock voted against management at 53 companies for "lack of progress" on climate concerns , while putting 191 companies "on watch."
"The more your firms are seen to embrace the climate transition and the opportunities it brings, the more the market will reward your firms with higher valuations," Fink wrote in the letter.
On the topic of companies revealing their net-zero plans, Fink said: "I urge companies to move quickly to issue them rather than waiting for regulators to impose them."
Fink said he was pushing both public companies and private companies to disclose their climate plans.
"If we want these disclosures to be truly effective – if we want to see true societal change – they should be embraced by large private companies as well," he said. "We believe that issuers of public debt also should be disclosing how they are addressing climate-related risks."
In January 2020, Fink wrote to CEOs saying that climate change would be "a defining factor in companies’ long-term prospects." He added: "We are on the edge of a fundamental reshaping of finance."
He also said that BlackRock, which manages $7.8 trillion of other people’s money, would avoid investments in companies that "present a high sustainability-related risk," according to the New York Times.
Source: Business Insider
Author: firstname.lastname@example.org (Kate Duffy)
Date: 2021 01 26
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