BlackRock is a truly global company. It has 70 locations in 30 countries and can reach people all over the world while still providing local service and building local relationships.
We handle assets for North and South American, European, Asian, Australian, Middle Eastern, and African clients.
BlackRock’s operations are guided by a sustainability strategy that aims to separate company growth from the firm’s impact on the environment while also making the operations more efficient and resilient.
BlackRock’s effect on the environment is lessened by, among other things, coming up with new ways to use green, renewable energy to power our operations and reduce waste.
The primary objective of BlackRock’s environmental sustainability strategy is emission reduction. BlackRock achieved carbon neutrality in its activities in 2020.
BlackRock achieved this milestone by implementing energy-saving practices, meeting its 100% renewable electricity goal2, and purchasing carbon credits to offset emissions that it could not otherwise eliminate.
Covering Up Their Gas Emissions
The SEC proposed a historic new rule last month that would require all publicly traded companies to report their emissions and climate risks in a standard way for the first time.
It is not only about direct emissions. Companies will also be required to report indirect, or “Scope 3,” emissions in their supply chains, which are often the largest source of emissions for the average business.
For example, almost all of Apple’s emissions come from the companies that make the parts for its phones and other goods.
Fewer than one-third of publicly traded companies in the United States currently publish their emissions voluntarily, and those that do so inconsistently make it difficult to compare company practices.
However, numerous nations currently mandate comparable disclosures: Next month, new climate disclosure laws will go into force in the United Kingdom.
The public will have 60 days to say what they think about the proposed rule. After that, the agency will vote on a final version within the next few months. If the bill is passed in its current form, big companies would have to start telling people about climate risks in 2019.
Climate Change Has a Significant Impact
Mr. Fink acknowledges that the greatest issue facing the firm’s clients is climate change.
Also, they are including climate studies in the risk management tool they sell to other financial institutions. This is likely because no financial model can be competitive without detailed climate models.
On a more mundane level, they will also remove firm directors who fail to address climate change.
A recent report from the Institute for Energy Economics and Financial Analysis (IEEFFA) says that bad investments in fossil fuel companies cost them more than $90 billion.
Additionally, Mr. Fink says in the letter that “Climate change has become a defining factor in the long-term prospects of companies.”
When millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that climate change will have on economic growth and prosperity, a risk that markets have been slower to reflect to date.
The article says, “Investors are increasingly considering these issues and recognizing that climate risk is investment risk.”
BlackRock has also joined the Climate Action 100+ program, which promises to cut emissions, improve governance, and make things more open.
In essence, pressuring major polluters to clean up. They also want to learn more about environmental, social, and governance (ESG) risks by getting better at analyzing the effects of climate change.
High Exposure To The Development Of Fossil Fuels
BlackRock has the most thermal coal, gas, and oil reserves of any U.S. asset manager because of the companies it owns.
It has put $11 billion into companies that are building more coal-powered power plants. This makes it the biggest investor in such companies in the world.
However, BlackRock has various options. Two products that track indices with big carbon footprints are the iShares MSCI Germany ETF and the iShares Select Dividend ETF.
BlackRock might stop including goods with big carbon footprints compared to benchmarks in its “sustainable” products, like the iShares MSCI EAF ESG Optimized ETF and the iShares Global Clean Energy ETF, if people keep buying them.
It could also support shareholder resolutions on climate change that attempt to make these corporations more sustainable.
Their Green Bonds
BlackRock contributes significantly to the expansion of the green bond market. As of March 31, 2020, BlackRock had about $16 billion in green bonds for our clients. These bonds were in both separate portfolios and larger fixed-income mandates.
Since it began, BlackRock has been a member of the Green Bond Principles Executive Committee. This is because it is an active market player. To help this type of asset, we talk to issuers, underwriters, public regulators, and clients all the time.
BlackRock has made its own green bond taxonomy to help the green movement.
This taxonomy ranks each BlackRock-labeled green bond from “light” to “dark” green based on how the proceeds will be used, the environmental benefits associated with the bond, and the issuers’ ongoing commitment to allocation and impact reporting.
We made a universe of green bonds that are labeled and colored by BlackRock and keep it in good shape.
The BlackRock CEO said, “I believe that the next 1,000 unicorn companies with a market capitalization of more than $1 billion will not be search engines or media organizations, but rather businesses generating green hydrogen, green agriculture, and green cement.”
In the meanwhile, some findings indicate that large asset managers such as BlackRock, Vanguard, and State Street “often opposed initiatives to strengthen climate-related financial disclosures”
This is dangerous and scary hypocrisy, but the reason they don’t want to use their power to help move away from fossil fuels is simple: they have a lot invested in dirty energy companies.
Rich people like Richard Branson, Jeff Bezos, and Elon Musk are flying on private planes to climate conferences to make it look like they care about the environment. This is at the expense of our planet.
From what we’ve seen so far, it’s clear that they’re trying to make themselves look better than others, even though they’ve been accused of “greenwashing” in the past.