BlackRock is changing its investment strategy because of climate change

[mahatmakanejeeves]

Source: CNN Business

BlackRock is changing its investment strategy because of climate change

By Julia Horowitz, CNN Business

Updated 7:10 AM ET, Tue January 14, 2020

London (CNN Business) -- A version of this story first appeared in CNN Business' Before the Bell newsletter. Not a subscriber? You can sign up right here.

BlackRock, the massive asset manager in charge of $7 trillion, will ditch investments that it considers a sustainability risk, including thermal coal producers -- part of an effort to put sustainability at the center of its approach to investing.

"Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance," CEO Larry Fink said in his widely-read letter to other chief executives released Tuesday.

Fink predicted that significant changes to how capital is allocated globally are coming, and "sooner than most anticipate."

Other pledges: BlackRock told clients that it intends to double its offering of exchange-traded funds that track companies that meet certain environmental metrics. It's also asking the companies it invests in to disclose plans for operating in a world in which the Paris Agreement's goal of limited global warming to less than 2 degrees Celsius "is fully realized."

"We will be increasingly disposed to vote against management and board directors when companies are not making sufficient progress on sustainability-related disclosures and the business practices and plans underlying them," Fink said.
....

Read more: https://www.cnn.com/2020/01/14/investing/premarket-stocks-trading/index.html

---

Full disclosure: I have some BlackRock funds. A lot of people do.

[Mike 03]

1. Intriguing quote.

Fink predicted that significant changes to how capital is allocated globally are coming, and "sooner than most anticipate."

Last summer my investment advisor asked me to look into "Circular Economy" stocks and investment ideas. It was an interesting experience, but he has not yet made any significant changes to the portfolios he manages. But he admitted he was "pretty concerned" about climate change.



I really encouraged him, saying I was deeply worried about it too, and would be happy with any changes he made even if the returns were lower.

[lark]

2. Guy who owns BlackRock is a huge repug and asswipe

When Obama was running, I had a very minor BlackRock investment account. I got a letter from the owner saying a vote for Barack Obama would destabilize our economy and vote for Mitt Romney - the friend of investors. I was so pissed. I already wanted to get of this fund because it was not a good producer, but couldn't until 2017 without taking a loss. The first day I could legally transfer out my $$ without taking a loss, I did so and I told them the reason was that the owner is helping destroy the working class of America by pushing their investors to vote in a partisan manner for the oligarch supporting party - the Repuglican one. I doubt anyone saw that - but it sure gave me great pleasure to write it and even more to move my money. It's so small, it's nothing to them, but it is important to me.

[hatrack]

3. Talk is cheap.

Also cheap - annual letters, aspirations, "commitments to cutting-edge technology", voluntary emissions guidelines, non-binding sustainability goals, paragraphs extolling a corporation's "conscience" on a website, adding green to the company logo.

Also cheap - pledges to meet net zero carbon goals by 2035, 2040, 2050, and total spending by the world's top 25 oil majors on low-carbon energy in 2018 - 1.3% of total budgets of $260 billion.

It appears that Mr. Fink has noted that a destabilized, burning world poses certain new risks to financiers and investors, and said as much to his clients. Uh, duh.