BlackRock Inc., the largest asset manager globally, has revised its decarbonisation investment guidelines, designating $150bn for funds that evaluate energy transition risks and opportunities.
Although these guidelines are European-based, they could influence US funds, according to ESG News.
The updated policy requires the affected funds to consider shareholder proposals on Scope 3 greenhouse gas emissions and climate-related lobbying efforts.
This demonstrates BlackRock’s attempt to balance the expectations of European clients prioritising decarbonisation with the legislative environment in Republican-led US states that oppose ESG criteria in portfolio decisions. Some of these states have even prohibited BlackRock due to its climate-risk policies.
In October 2023, BlackRock introduced a private debt fund focused on the climate transition to support institutional investors’ low-carbon objectives.
Despite CEO Larry Fink’s early warnings about the impact of climate risks on long-term investments, BlackRock has recently scaled back its climate initiatives. The company transferred its Climate Action 100+ membership to a smaller UK subsidiary.
The new guidelines explained, “For clients who have not directed BlackRock to prioritise climate risks and decarbonisation as an investment objective, [BlackRock] will continue to undertake our stewardship responsibilities in line with our benchmark policies, with a sole focus on advancing those clients’ long-term economic interests. This includes considering climate-related risks and opportunities where material to the company’s long-term financial returns.“
This strategic shift by BlackRock underscores its effort to navigate global investment priorities, manage complex regulatory landscapes, and address climate risks and opportunities.
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