BlackRock has announced the firm is leaving the Net Zero Asset Managers (NZAM) initiative.
In a letter to its clients obtained from Bloomberg, the firm stated their NZAM membership “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials”.
The NZAM initiative is an investor group committed to achieving net-zero portfolios by 2050 or sooner across all assets under management (AUM). Currently, it counts over 325 signatories representing $57.5trn (£46.7trn) in AUM.
This exit comes as other financial firms have ended their membership in net-zero climate alliances such as the Net Zero Banking Alliance (NZBA). This includes major US banks such as JPMorgan Chase, Morgan Stanley, Citi, Bank of America, Wells Fargo and Goldman Sachs.
In response to the news, Ben Cushing, campaign director for the Sierra Club’s Fossil-Free Finance campaign, said: “Regardless of the political pressures Larry Fink is responding to, the fact remains that climate change poses one of the greatest risks to our global economy and the long-term investments BlackRock’s clients rely on.
“Membership in voluntary alliances sets an important baseline, but to fulfill its fiduciary duty to long-term investors, BlackRock must support real-world decarbonisation through stronger shareholder voting and by directing capital toward industries that mitigate systemic climate risks. If BlackRock won’t do that, its clients should find a different asset manager that will.”
Hortense Bioy, head of sustainable investing research at Morningstar Sustainalytics, added: “The news that BlackRock is exiting the NZAM initiative should come as no surprise to anyone. BlackRock has hung in there as long as it could, but the pressure has become too great, and the reputational and legal risks too high, just before Trump takes office.
“BlackRock was not the first and will not be the last financial organisation to quit a net-zero initiative. This is another setback for NZAM and the broader Glasgow Financial Alliance for Net Zero, but what matters more is BlackRock’s real commitment to pushing the decarbonisation and transition financing agenda.
“The firm will have some convincing to do in Europe, where, in general, investors care more about asset managers’ climate commitments than in the US.”
PA Future has contacted BlackRock for comment.
