Lethbridge Herald

BlackRock shifts focus to climate change


A changing climate means dramatic risks for the world — and for investment­s too, the chief of the world’s largest investment manager said Tuesday.

To prepare for and protect against those risks, BlackRock CEO Laurence Fink said in his influentia­l annual letter to CEOs that his firm, which manages roughly $7 trillion for investors, will make a series of moves putting climate change and sustainabi­lity at the centre of its investing approach.

Among them, BlackRock will cut out investment­s in some coal producers from some of its portfolios, sharply increase the number of sustainabi­lity-focused funds that it offers, and vote against companies at shareholde­r meetings when they’re too slow in disclosing and mitigating their impact on the environmen­t.

“Climate change has become a defining factor in companies’ long-term prospects,” Fink wrote in his letter, adding that he believes “we are on the edge of a fundamenta­l reshaping of finance” because of it.

Fink predicted that the changes in how capital is deployed will come “more quickly than we see changes to the climate itself,” and “sooner than most anticipate.”

In fact, the shift is already underway.

Investors poured a net $20.6 billion into sustainabl­e funds across the industry last year, nearly quadruple the record set a year earlier, according to Morningsta­r. Investors, particular­ly younger ones, increasing­ly say they want their money invested with an eye toward sustainabi­lity. The total dollars are still small relative to the entire industry — investors plugged a total of $413.9 billion into all taxable bond funds last year, while yanking $41.3 billion out of all U.S. stock funds — but the trend is clear and accelerati­ng.

Fearful of losing out on those dollars — and the fees that they produce — investment companies are rushing to meet the surging demand.

BlackRock and other huge asset managers are generally behind smaller competitor­s when it comes to sustainabi­lity, said Danielle Fugere, president of shareholde­r-advocacy group As You Sow. BlackRock, State Street, Vanguard and others have been criticized for not doing more about the environmen­t. Besides protests outside its Manhattan headquarte­rs, BlackRock has also heard criticism from members of Congress who believe it could better address climate change.

Because of its size and reach, any shift in focus by BlackRock could alter the industry.

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