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Citing Climate Change, BlackRock Will Start Moving Away from Fossil Fuels

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06.02.2020

If you felt the earth tremble a little bit in Manhattan on Tuesday morning, it was likely caused by the sheer heft of vast amounts of money starting to shift. “Seismic” is the only word to describe the recent decision of the asset-management firm BlackRock to acknowledge the urgency of the climate crisis and begin (emphasis on begin) to start redirecting its investments.

By one estimate, there’s about eighty trillion dollars of money on the planet. If that’s correct, then BlackRock’s holding of seven trillion dollars means that nearly a dime of every dollar rests in its digital files, mostly in the form of stocks it invests in for pension funds and the like. So when BlackRock’s C.E.O., Larry Fink, devoted his annual letter to investors to explaining that climate change has now put us “on the edge of a fundamental reshaping of finance,” it marked a watershed moment in climate history.

He’s right about the financial future, of course—one can’t look at the clouds of smoke now obscuring the Australian continent and come away thinking that we can maintain our present course. But anyone paying attention—which includes investment-fund C.E.O.s—has known the score for years. What’s changed now are a couple of factors.

For one, fossil-fuel stocks have begun to drag down portfolios. As the Times observed, “Had Mr. Fink moved a decade ago to pull BlackRock’s funds out of companies that contribute to climate change, his clients would have been well served. In the past 10 years, through Friday, companies in the S&P 500 energy sector had gained just 2 percent in total.........

© The New Yorker