BlackRock issues climate change warning to investors

BlackRock CEO Larry Fink

In the fourth quarter that ended on December 31, BlackRock generated $128.84 billion in revenue. The company's fourth-quarter earnings exceeded Wall Street forecasts.

BlackRock, a massive asset manager in charge of approximately Dollars 7 trillion, who made helping more and more people experiencing financial well-being its goal.

The passing of the $7 trillion mark follows a decade of dramatic growth fueled by the rise of funds that trade on exchanges and mirror markets.

It is at the heart of the news in France, accused by part of the opposition of trying to promote the funded retirement savings system.

The announcement comes from BlackRock CEO Laurence D. Fink via an annual investment forecasting letter sent out to customers at the start of the year. "If we become overinflated about the numbers we're managing, we're going to forget our responsibilities and moral objectives", he said.

"BlackRock's new initiatives match the size of the crisis we're seeing in 2020 and are the direct result of an outpouring of pressure from the global climate movement", Sunrise Project senior strategist Diana Best said in a statement.

"Every government, company, and shareholder must confront climate change", Fink continued.

The operations of entire countries and companies will change as sustainability requirements take shape, Fink said. "Purposeful companies have to show their social goal to clients and to their employees".

Elsewhere in the letter, Fink passes the buck for taking climate action to the public sector, writing "This challenge can not be solved without a coordinated, worldwide response from governments, aligned with the goals of the Paris Agreement", and "government must lead the way in this transition", as though a serious commitment from BlackRock and its $7 trillion in assets wouldn't change the zeitgeist and the news narrative around sustainability overnight.

Many commentators scoff at that idea, including Ian McGugan, who writes in The Globe and Mail that "BlackRock's Green Investing Strategy is Not a Moral Awakening".

With much attention now on geographic locations around the world where the effects of climate change are thought to be keenly felt, including the fires in Australia, rising seas in coastal areas and receding glaciers in the Arctic zone, the potential effects of climate change on other aspects of human culture, such as economic decision-making, has not always generated the same headlines.

The movement of money into the firm reflected crosscurrents of investor behavior this year. The firm also held $3.8 billion in Waste Management Inc. stock as of October 2019. BlackRock sees more room to grow in the bond ETF space. The group handles investments for many public and private pensions, for example, as well as other financial entities. Excluding items, however, Wednesday's report revealed BlackRock's quarterly EPS at $8.34 instead. The argument that BlackRock's hands are tied on fossil fuels exposure ignores its ability to evolve.

The change to BlackRock is substantial.

The firm has no channel of its own to directly sell funds to everyday investors.

BlackRock has a reputation of the largest asset manager across the globe.



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