BlackRock and Vanguard tell UK they will not quit fossil fuel investments
The world’s two biggest asset managers BlackRock and Vanguard are among the financial institutions that have told a UK inquiry they will continue to invest in fossil fuels and do not subscribe to the view that climate change plans require an end to new coal, oil and gas investment.
BlackRock is among the asset managers attempting to take a neutral investment stance after Republican attorneys-general and state governors in the US accused the institutions of staging a “boycott” on the fossil fuel sector. Missouri on Tuesday became the latest state to punish the $8tn asset manager, as Treasurer Scott Fitzpatrick announced that the state’s retirement system had pulled out $500mn from BlackRock funds.
BlackRock and Vanguard’s statements on Tuesday were in response to a request by the UK’s Environmental Audit Committee. The committee wrote in August to members of the Glasgow Financial Alliance for Net Zero, an umbrella climate finance group, asking how they would balance retiring fossil fuel assets with assuring the UK’s energy security, given the “pivotal” role of the finance sector in reaching the UK’s environmental goals.
Some US-based members of the Glasgow alliance, such as JPMorgan, recently said they could quit, after a UN accreditation body introduced new rules in June saying all members should phase out financing of unabated fossil fuels, or those which did not capture the emissions. The alliance said last week that financial sector subgroups, including the Net Zero Asset Managers alliance, which counts BlackRock, Vanguard and Brookfield Asset Management as members, were free to decide whether to align with the UN guidelines. This was a departure from the policy of making it a condition of membership.
Ben Caldecott, director of the UK Centre for Greening Finance and Investment research initiative, said: “This begs the question of what the criteria to be a member of Gfanz is. Financial institutions shouldn’t be investing in new fossil fuel infrastructure as this is not compatible with the aims of the Paris agreement [on the climate].”
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This story originally appeared on: Financial Times - Author:Brooke Masters
