BlackRock, the world’s largest asset manager, has announced that it will leave the Net Zero Asset Managers initiative (NZAM), as a ‘climate climbdown’ amongst US firms continues ahead of Donald Trump’s inauguration as US President next Monday (20th January). It follows earlier news that all six of the largest US banks – JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs – have quit the Net-Zero Banking Alliance, a UN-backed climate group for the banking sector[i].
NZAM, which launched in December 2020, asks signatories within the asset management industry to support the goal of net zero emissions by 2050, along with a commitment to support investing aligned with net zero emissions by 2050 or sooner. The initiative’s website states that signatories include more than 325 asset managers, representing $57.5 trillion in assets[ii]. It is worth noting that it does still list BlackRock (itself responsible for the management of $11.5 trillion in assets) as a member.
When BlackRock joined the initiative in 2021, Chief Executive and Chairman Larry Fink said: “Helping investors prepare their portfolios and capture investment opportunities on the path to net-zero is one of our greatest responsibilities. BlackRock is proud to put its name behind this initiative, and I am encouraged to see the increasing momentum towards net zero across the public and private sectors.”[iii]
However, announcing the firm’s plans to leave NZAM in a letter to investors, Vice-chair Philipp Hildebrand said that membership of NZAM had “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials.”[iv] He added that departure from NZAM “does not change the way we develop products and solutions for clients or how we manage their portfolios. BlackRock’s active portfolio managers continue to assess material climate-related risks, alongside other investment risks.”[v]
A spokesperson for UN Secretary-General Antonio Guterres has said that he is disappointed that BlackRock has left the climate group. The UN’s Stephane Dujarric said: "The decision by BlackRock is disappointing especially given the critical role the private sector, and especially asset managers, have to play in combatting the existential threat of climate change. We encourage those companies that remain in the Net Zero alliance and other such initiatives to stay the course and continue their efforts to be active in the fight against the devastating impact of climate change"[vi]
The decision to leave NZAM appears to be part of a growing change in attitude towards climate action at BlackRock. Last year we reported that the firm has made significant cuts in its support of ESG (Environmental, Social & Governance) shareholder resolutions, backing just 4% between June 2023 & June 2024[vii]. In a statement at the time the firm confirmed that of the 493 environmental and social proposals put forward by shareholders in the 12 months through to June 2024, it supported just 20 - equivalent to 4%. This represents a continual decline over the past few years, when back in 2021, BlackRock supported a record 47% of environmental and social resolutions, this then fell to 22% in 2022, and 7% in 2023.
Shareholder proposals often call on companies to quantify their environmental risks, provide greater data on emissions, or set out risk mitigation plans, with these rising in recent years- for example a total of 455 was seen in 2023 with this growing to the 493 recorded in June this year. Regions where corporations are not mandated to disclose climate data, such as the US, are more likely to see such shareholder action, compared to regions with heavier regulation, for example the EU.
[i] BlackRock quits climate change group in latest green climbdown
[iii] 43 New Asset Managers Commit to Net Zero Emissions Goal | Ceres: Sustainability is the bottom line
[iv] ESG round-up: BlackRock quits Net Zero Asset Managers initiative
[v] UN chief upset Blackrock quit climate group, urges others to stay
[vi] Ibid
[vii] BlackRock support for shareholder ESG resolutions hits an all-time low
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
