Blackrock joins war on climate change
Media advisory from Professor Bobby Banerjee
Professor Bobby Banerjee from Cass Business School comments on the news that Blackrock, the world’s largest asset manager, is attempting to position itself as a climate change champion after announcing that it would stop actively investing in major coal producers and increase it the money it puts into sustainable companies to £760 billion, from £68 billion at present.
“Blackrock’s announcement clearly taps into the trend for corporates to try and capitalise the ongoing calls for them to respond strongly to climate change. It could be argued that their bold ‘war on climate change’ is the latest case of greenwashing. It’s also unclear if institutional investors really do care about climate change – even if they understand the risks of climate change, their money is still going into fossil fuel extraction at record levels. Blackrock seems keen to demonstrate that they are taking action to tackle the problem but will need to show that their new strategy will result in action, not just words.
“Even if fund managers are made aware of the risks, I’m not sure if it will lead to divestment. Since the Paris agreement was signed global banks have invested $1.9 TRILLION into fossil fuels.
“What does Blackrock mean by becoming 'increasingly disposed' to vote against company boards which aren't doing enough to tackle climate change’? How are they defining what is enough? Will they set targets for total reductions in emissions every year instead of emissions intensity targets which are easier to achieve and which do not reduce total emissions? I’d be interested to know what their divestment plans and timelines for their current investments in fossil fuels are.
"Also, it is important to note that fossil fuel companies with ‘strong ESG scores’ routinely spend millions of dollars every year lobbying governments against stricter climate regulation.”
Professor Banerjee is Associate Dean for Research at Cass Business School. His research interests include sustainability, climate change and corporate social responsibility. View his full profile here.