The official responsible for New York City’s public pension funds is pressing
to recommit to achieving net zero emissions across its investment portfolio.
In a letter Wednesday to BlackRock Chief Executive
New York City Comptroller
said the asset manager’s voting record in the 2022 proxy season and recent public statements have him concerned that BlackRock is backtracking on its climate commitments.
Mr. Lander’s letter follows an early August missive from 19 state attorneys general that accused BlackRock of actively pressuring companies to phase out fossil fuels to the detriment of the local economies that depend heavily on the energy industry.
BlackRock, in response, said it doesn’t dictate emissions targets for the companies in which it invests. The company cited its $100 billion worth of investments in Texas energy companies as proof that it isn’t boycotting fossil fuels.
“BlackRock now abdicates responsibility for driving net zero alignment on its own portfolio by saying that it does not ask companies to set specific targets,” Mr. Lander wrote. BlackRock manages about $43 billion in investments for three New York City pension funds.
BlackRock declined to comment. In its response to the August letter, the company said it has a fiduciary obligation to “identify short- and long-term trends in the global economy that may affect our clients’ investments.”
BlackRock is the world’s biggest investor, with about $8.5 trillion in assets under management. It holds stakes in more than 14,000 companies worldwide and casts votes on proxy proposals on behalf of passive investors.
For years, the company has walked a political tightrope over its stance on climate issues.
“Climate risk is investment risk,” Mr. Fink wrote in his 2020 annual letter. That comment—and others like it—rankled executives in the oil-and-gas industry and officials in the states that they call home.
Texas Comptroller Glenn Hegar last month included BlackRock on a list of 10 financial firms that the state has labeled as hostile to energy companies, a move that could lead state entities to stop doing business with the asset manager.
“We disagree with the Comptroller’s opinion,” a spokesperson for BlackRock said at the time.
Now, BlackRock is facing pushback from officials on the other side of the debate.
Mr. Lander, the New York City comptroller, asked BlackRock to publish plans that detail the asset manager’s commitment to achieving net zero. He also asked BlackRock to press its portfolio companies to disclose climate-related lobbying and work to end lending and insurance for new fossil-fuel supply projects.
He criticized BlackRock’s decision to support fewer climate-related shareholder proposals in the 2022 proxy-voting season. BlackRock voted in favor of 24% of environmental and social shareholder proposals in this year’s proxy-voting season, down from 43% last year. The firm said the decline was partly because of a crop of “more prescriptive” shareholder proposals.
“The fundamental contradiction between BlackRock’s statements and actions is alarming,” Mr. Lander wrote. “BlackRock cannot simultaneously declare that climate risk is a systemic financial risk and argue that BlackRock has no role in mitigating the risks that climate change poses to its investments by supporting decarbonization in the real economy.”
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