The world’s biggest private fund manager, BlackRock, announced it will divest from activities that “present a high sustainability-related risk”, a move welcomed by environmentalists as being highly significant.
Environmentalists have long criticised investors for their ties to corporations that cause significant damage to the environment, such those in the fossil fuel industry. They hope galvanise a reassessment on the interplay between money-flows and the climate crisis.
In comments to The Guardian, a leading climate science writer Bill McKibben described BlackRock’s move as “remarkable”.
“This is the biggest pot of money in the world and until today, its leaders have refused to acknowledge the biggest thing happening on the planet – the accelerating rise in temperature. So, it indicates that the facts on the ground of the climate crisis are so grave that no one can turn away, and that activist pressure has reached a point that even the richest companies are not immune.”
In two letters on Monday, Larry Fink, CEO at BlackRock, announced: “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance” and as a result, the company will be divesting $500m (€448m) from coal-related businesses.
The announcement called on “every company, not just energy firms, to rethink their carbon footprints”.
BlackRock, which holds $7tn in assets, has come under intense pressure to reform the funds it offers investors.