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BlackRockthe world’s largest asset manager, recently backed out of prominent climate change policy with the Net Zero Asset Managers (NZAM) initiative, a coalition committed to achieving net zero greenhouse gas emissions by 2050 .
The company cited last week that its membership had “caused confusion about BlackRock’s practices and subjected us to legal inquiries from various public officials.”
The management agency also had its say current investment portfolio managers will “continue to assess material climate-related risks.”
BlackRock withdrew from its Net Zero climate commitment. (Yang Meiqing/VCG via Getty Images)
Meanwhile, the president of the non-profit Consumer’s Research, Will Hild, told Fox Business that the withdrawal comes after a major lawsuit involving the asset management company.
In Spence v. American Airlines, Inc., a federal court found that American Airlines and certain employees breached their legal responsibilities under the Employee Retirement Income Security Act (ERISA). The breach involved offering funds managed by BlackRock, such as S&P 500, Russell 1000 and Russell 3000 index funds, to the company’s 401(k) plans. Hild said the ruling raises concerns that other companies offering similar funds could face similar legal challenges.
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Larry Fink, chairman and CEO of BlackRock Inc., is shown here. BlackRock has pulled out of a NetZero initiative. (Victor J. Blue/Bloomberg via Getty Images/Getty Images)
In a letter sent to all Fortune 500 companies warning them of the risks associated with Black Rock first obtained by Fox Business, Hild wrote, “Although BlackRock exited one of its net zero alliances last week past, the company proudly proclaimed that the “exit does not change the way… we manage the portfolios (of clients).’ And BlackRock maintains its membership of UN PRI where it has pledged to “embed ESG issues into (its) property policies and practices.”
“Trustees therefore risk breach of their duties if they continue to entrust plan assets to BlackRock,” the letter said. “In conclusion, any corporation or business that uses BlackRock to manage their pension plans is now effectively aware that BlackRock has acted with a dual motive in the past and is still publicly committed to doing the same going forward.”
“Net Zero” commitments became widespread after 2021 following a United Nations climate conference. Conservative lawmakers generally oppose such policies, arguing they could hurt economic growth, especially in energy-producing states. They often criticize policies as “woke capitalism”, claiming they could lead to rising energy costs, job losses in traditional energy sectors and unnecessary government intervention.
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BlackRock headquarters in New York, USA on Wednesday, December 27, 2023. (Angus Mordant/Bloomberg via Getty Images/Getty Images)
Hild told Fox Business that he believes President-elect Donald Trump win weighs in favor of rolling back some of these left-wing initiatives, but the antitrust case was likely the cause of the exit from its Net Zero pledge, as the company only withdrew part of the pledge.
“I care about shareholders, but I care more about consumers,” Hild said. “And the problem is that all this ‘Net Zero’ stuff it increases costs that then have to be passed on to the consumer,” Hild said. “This is increasing costs everywhere from the gas pump to the grocery store, and a major contributor to inflation “.
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An NZAM spokesman told Reuters the withdrawal was disappointing and that “climate risk is a financial risk”.
“NZAM exists to help investors mitigate these risks and realize the benefits of the economic transition to net zero,” the spokesman said.
Fox Business has contacted NZAM for further comment but did not receive a response by publication deadline.
