BlackRock Quits Net Zero Asset Managers Under Republican Pressure

The New York-headquartered firm, which manages $11.5 trillion of assets, said it would leave the Net Zero Asset Managers initiative.

Members of the group pledge to support the goal of Net Zero greenhouse gas emissions by 2050, including by using their votes on behalf of shareholders at corporate meetings.

The group has more than 325 signatories managing more than $57.5 trillion, according to its website.

In a letter to clients, BlackRock said its membership of organisations like the Net Zero Asset Managers initiative had “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials”.

The asset manager said that two thirds of its global clients were committed to cutting emissions to Net Zero and that its departure “does not change the way we develop products and solutions for clients or how we manage their portfolios. BlackRock’s active portfolio managers continue to assess material climate-related risks, alongside other investment risks, in delivering for clients”.

Larry Fink, Chairman and Chief Executive of BlackRock, has embraced the principles of ESG, which stands for environmental, societal and governance considerations. However, in 2023 he said he had stopped using the phrase ESG because “it’s been unfortunately politicised and weaponised”. Republican politicians have labelled Net Zero efforts as “woke” and claim they violate antitrust laws.

In November, BlackRock, along with Wall Street asset managers Vanguard and State Street, were sued by a group of Republican-led states over allegations they had breached competition law by using their investments in coal companies to force them to cut production of the fossil fuel. BlackRock has denied wrongdoing and said the lawsuit “discourages investments in the companies consumers rely on”.