Investor nuns are turning up the heat on BlackRock’s climate change record

Looking ahead.
Looking ahead.
We may earn a commission from links on this page.

Climate emergency–related criticism of the titanic fund manager BlackRock seems to be coming from all sides, lately. Last month, Extinction Rebellion activists in London protested outside its offices, including by dumping ashes outside the building “to represent the destruction of the Amazon fires.” This week, former vice president Al Gore entered the debate, accusing the asset manager of financing the “destruction of human civilization.” Now, a group of Catholic nuns have joined the chorus.

The Sisters of Mercy of the Americas, an investment fund representing 9,000 nuns, criticized the asset manager for failing to use its multi-trillion-dollar might to encourage companies to divest from harmful fossil fuels, according to a Financial Times report (paywall). The intervention comes via their Mercy Investment Services, which this week co-filed a joint shareholder motion with a group of investors, including other religious groups, ahead of BlackRock’s annual meeting.

“We believe it is BlackRock’s fiduciary responsibility to review how climate change quantitatively impacts…portfolio companies, evaluate how specific shareholder resolutions on climate may impact shareholder value, and vote accordingly,” the group said.

In 2019, BlackRock supported only six out of 52 climate-related resolutions, despite in-house research suggesting that climate change would ultimately prove harmful to investment returns. A July 2019 report from the Institute for Energy Economics and Financial Analysis estimated that the group had lost around $90 billion in the last 10 years by ignoring the financial risk of fossil fuel investment. This voting record, Mercy Investment Services said, appears “inconsistent with [BlackRock’s] statements about climate change.”

In 2017, a similar resolution was ultimately withdrawn ahead of the annual meeting. But progress since then has been “woefully inadequate,” shareholders said, necessitating yet another motion. (BlackRock, for its part, intends to speak to the filers and said it engaged with hundreds of companies globally “on a range of environmental topics.”)

In the past month, hundreds of investors called for urgent action on climate change, among them UBS Asset Management and the California Public Employees’ Retirement System. They’ve demanded an end to fossil fuel subsidies, a transition away from thermal coal used in power generation, and a “meaningful” price for carbon. BlackRock’s name was conspicuously absent from their ranks, encouraging still more scrutiny from the growing number of investors with an eye on our heating world.