World’s largest fund abandons green activism over Russia fears
BLACKROCK has warned that it will vote against most shareholder green activism this year for being too extreme, in a significant U-turn by the world’s biggest money manager.
The company said it was concerned about proposals to stop financing fossil fuel companies, including forcing them to decommission assets and setting absolute targets for reducing emissions in their supply chains.
It comes as Blackrock said Russia’s invasion of Ukraine has impacted the transition to net-zero, adding that shortterm investment in traditional energy sources is now required to boost security. In a stewardship report, the asset manager said: “We do not consider [the proposals] to be consistent with our clients’ long-term financial interests.”
It added: “Many of the climaterelated shareholder proposals coming to a vote in 2022 are more prescriptive or constraining on companies [than last year] and may not promote long-term shareholder value.”
Last week, Barclays also defied green
activists with a pledge to invest in new oil and gas projects to help Europe wean itself off Russian fossil fuel.
Blackrock has ballooned to manage more than $10 trillion (£7.3 trillion) in assets, giving the company significant stakes and influence in many of the world’s largest corporations. Its update represents a volte face for the asset manager which has been at the forefront of Wall Street’s push to encourage companies to shun fossil fuels and transition to greener alternatives.
In January 2020, chief executive Larry Fink, said “climate risk is investment risk” as he positioned Blackrock as a leader in ethical, social and governance (ESG) investing.
The decision to distance itself from “prescriptive” climate change policies comes as institutional investors face criticism for allegedly pushing political agendas.
A Blackrock spokesman said: “Blackrock is interested in companies’ strategies and plans for responding to the challenges – and capturing the opportunities – of the energy transition, because they will have a direct impact on our clients’ investment outcomes.”