BlackRock is right to abandon eco-activism

Is this the end of climate activism from pension providers and other institutional investors? BlackRock, which manages $10 trillion in assets, has toned down its enthusiasm for blocking company boards that are not sufficiently committed to a carbon-free future.

In January 2020, BlackRock’s CEO Larry Fink shook up the world of investment by writing an annual letter to the CEOs of companies in which he invests, warning them that in future BlackRock would take a more critical view of their climate change policies. He wrote on that occasion:

Last September, when millions of people took to the streets to demand action on climate change, many of them emphasised the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance… These questions are driving a profound reassessment of risk and asset values.