BlackRock CEO Larry Fink on companies meeting net-zero,climate targets
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Larry Fink, chief executive officer of BlackRock Inc.
Christopher Goodney | Bloomberg | Getty Images
Big companies and banks shouldn’t be the only “climate police” in the world, says BlackRock Chief Executive Larry Fink, who called on governments and society to play their part in climate change.
We’ll be asking large companies to become climate police if governments only ask public companies to make progress, which is a majority of large businesses. “And I don’t believe that’s our responsibility,” Fink said while speaking virtually at the Ecosperity Climate Conference in Singapore.
If the world is going to move to net-zero emissions, then “we can’t just ask these public companies to move forward,” said Fink.
“Therein lies the problem, and that is what I really worry about. He said that he didn’t wish to become the environment police. “I don’t want BlackRock — because we’re a large investor — to be telling every company who’s not moving forward [that] we’re going to divest of all your shares. This is not the best outcome.
This is also called carbon neutrality. It’s when an entity releases as many greenhouse gases into the atmosphere as it removes.
Environmental activists are ‘not being thoughtful’
Fink said that while environmentalists have “played a big role” in lobbying for change from asset managers, he doesn’t “necessarily agree with what they’re talking about.”
Fink stated that they don’t think about how corporates or politicians might move forward.
Fink said that BlackRock works for the clients’ interests. Environmentalists have the right to protest whatever they like, but BlackRock is acting for clients.
The money is not ours. If a client wants us to invest in an XYZ index, and that XYZ index has, you know, 8% allocation to dirty hydrocarbons — other than the whole — we have to be a fiduciary and invest in it.”
Fink explained that Fink was frustrated by some environmentalists regarding finance. They need to be able to recognize the importance of finance as well as the difference between asset owners and advisors.
‘Opaque’ carbon footprint and inequality
As firms increasingly come under pressure to move to net-zero, some companies have managed to circumvent the rules around those climate targets, Fink pointed out.
He stated, “Public companies sell their worst hydrocarbons to make the public look better.”
While he did not name any company, there have been recent reports of top oil companies selling off their oil assets with the most emissions to meet their net-zero targets.
Fink stated that the “carbon footprint of the planet hasn’t changed” and it is now more opaque.
In addition, Fink stated that the global climate change management will lead to “even greater inequality” among the developed and less-developed countries.
However, this could be reduced by global government collaboration.
“If we are truly trying to eliminate the threat of two or three degree increases in temperatures, it is not going to happen [if] we’re being dishonest with ourselves, and we think we get that just by asking a bunch of public companies to move forward,” Fink reiterated.
“We need boldness by governments — not just boldness by a couple CEOs, because we know our power to move the curve is very small … we need to do this together,” he said.
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