Big Apple criticized ESG BlackRock’s response

In recent weeks, some government officials have backed away from introducing ESG factors when considering public pension investments — now another is taking issue with that objection, criticizing BlackRock CEO Larry Fink for not taking a stronger pro-ESG stance.

In a footnote-heavy eight-page letter to BlackRock CEO Larry Fink, New York Comptroller Brad Lander, “trustee, custodian and delegated investment advisor to New York’s pension systems,” expressed concern that BlackRock was not exerting much pressure. enough on its commitment to reduce carbon emissions. BlackRock currently manages three $43 billion Big Apple retirement plans.

“BlackRock cannot simultaneously claim that climate risk is a systemic financial risk and claim that BlackRock has no role to play in reducing the risks that climate change poses to its investments by supporting the decarbonization of the real economy,” he writes in a letter dated 21 September. “As a fiduciary aware of the risks of inaction, BlackRock must demonstrate a plan to use its position as the world’s largest asset manager, with all the corporate governance responsibilities that come with that position, to transition its portfolio companies to take their business to the next level. corresponds to a pure zero economy.”

Lander states that the letter, written by “Attorneys General from Arizona, Nebraska, Kentucky, and 16 other states who wrote BlackRock on August 4, 2022,” “wages a political distraction war in hopes of defending the fossil fuel interests that have taken over their states,” and comments that Texas Comptroller Hegar’s recent directive to boycott BlackRock “… irresponsibly jeopardizes Texas pension fund revenues and potentially increases costs for Texas taxpayers. But political theater cannot and should not guide fiduciary action.”

But Lander says that in a response to BlackRock on September 6[i] To the Attorney General: “BlackRock now disclaims responsibility for net zero alignment in its own portfolio, stating that it does not ask companies to set specific emissions targets and that its participation in NZAMI does not mean that BlackRock sets or achieves any net zero. . goals”. He stands up for criticism that “BlackRock goes so far as touting its ongoing investments in fossil fuels – without specific zero goals or commitments or any plan to phase out the very investments that increase carbon emissions – as in something necessary.” part of the transition to a green economy”.

Lander, stating that the three New York funds “cannot achieve our zero goals without the active support of all of our asset managers, starting with BlackRock as our largest manager”, makes three “requests”:

  • Publish an implementation plan that clearly clarifies BlackRock’s commitment to achieving zero purity across its entire portfolio, with specific steps detailing how the company intends to achieve science-based goals within a defined time frame, and clear mechanisms for regular reporting on Scope 1, 2, and 3 issues for of all assets in the BlackRock portfolio.
  • Provide a detailed approach to keeping fossil fuels in the ground and phasing out high emission assets.
  • Support climate change action through transparent corporate engagement that requires disclosure of climate-related lobbying, works to end lending and insurance for new fossil fuel supply projects, and promotes evidence-based goals in portfolio companies.

He concludes by referring to the damage done to New York City by Hurricane Ida and Superstorm Sandy, and then notes that “for the City of New York, not only our retirement portfolios are at risk, but also our social and financial well-being.” – the existence of our city itself. There is no time to delay. That’s why we made these zero net emissions commitments. That’s why we take them seriously. That is why we will prudently review our business relationships with all of our asset managers, including BlackRock, through the lens of our climate responsibility.”


[i] “We are not dictating to companies, as suggested in your letter, what specific emissions targets they should meet or what type of political lobbying they should engage in,” Blass said. “That’s the role of the company’s management team and the board of directors – that’s not the responsibility of minority investors like BlackRock.”

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