Asset management behemoth BlackRock wrote a letter to institutional investors Thursday announcing its exit from an emissions-focused investor group, according to the Financial Times (FT).
The firm, which manages over $10 trillion and has been a leader in environmental, social and governance (ESG) investing, has left the Net Zero Asset Managers (NZAM) coalition — a United Nations–sponsored collection of financial services companies that have pledged to achieve net-zero portfolios by 2050 or sooner, the FT reported. The move comes less than two weeks before President-elect Donald Trump, who plans to embrace fossil fuels in his second term, takes office, and follows the exits of a slew of other corporations, including Goldman Sachs Group, Wells Fargo & Co., Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase & Co.
In the letter to investors, vice-chair Philipp Hildebrand wrote that the asset manager’s membership in NZAM had “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials,” according to the FT.
The firm began its ESG initiative in 2020, with CEO Larry Fink stating that “climate risk is investment risk” and that climate change would spark a “fundamental reallocation of capital.” However, the world’s largest asset manager exit has been backpedaling on its ESG efforts as of late, only supporting about 4% of the 493 environmental and social investment proposals shareholders put forward between the end of June 2023 and the end of June 2024, down from a rate of 47% in 2021.
BlackRock has also walked back some of its diversity, equity and inclusion (DEI) efforts, editing their DEI language to be less racially oriented.
Fellow investment firm Vanguard left NZAM in 2022, while financial services firm State Street remains in the environmental coalition.
“The news of BlackRock’s departure from NZAM should be music to the ears of every American consumer,” Will Hild, executive director of conservative nonprofit Consumers’ Research, told the Daily Caller News Foundation. “NZAM is an illegitimate cartel of asset managers pushing harmful and costly net zero policies across the entire economy. The activities of NZAM and its members raise prices on Americans everywhere from the gas pump to the grocery store.”
When reached for comment, BlackRock referred the DCNF to a report confirming their departure from NZAM.
Featured Image Credit: Gage Skidmore from Surprise, AZ, United States of America
