11 Jan 2020 Worlds’ biggest Asset Managers are urged on climate change accountability
World’s biggest asset managers are facing enormous pressure over the role they (do not) play on climate change. Public opinion, shareholders and governmental institutions are urging JPMorgan, Vanguard and BlackRock to substantially change their strategies over climate change.
What the last two months of 2019 showed us are the impacts of climate change. Recent bushfires in Australia has set a new high temperature record Down Under, devastated Australian biodiversity and wildlife, killed at leat two dozen people, and forced tens of thousand to evacuate their shelters.
However, asset managers still seem reluctant to tackle climate change. As MajorityAction’s report on asset managers’ voting behaviour demonstrates, JPMorgan, Vanguard and BlackRock are the three worse-performing companies as far as support for climate-critical resolution is concerned. In 2019, they voted in favour of climate-critical resolution 15% of the time.
However, as former Bank of England governor Mark Carney highlighted, such a negligent behaviour towards climate change risks to put clients’ assets at risk. This perspective is likely the worst of its kind for asset managers. The three asset managers control roughly one quarter of the voting power across big US companies, and activists, shareholders and institutions are calling them for greater environmental transparency.
In December 2019, Rashida Tlaib and some her fellow Democratic Congresspersons sent BlackRock Chairman and CEO, Laurence D. Fink, a letter asking BlackRock for a Due Diligence account for the runway deforestation in Brazil, as well as to use BlackRock’s leverage to lobby Brazil’s president Jair Bolsonaro for immediate action.
US Democratic congresspersons addressed BlackRock because of its “substantial investments in the agribusiness companies operating in the Brazilian Amazon”, like JBS and Bunge. Unchecked deforestation of 1,330 square miles (3,444 square kilometres) of Brazil’s Amazônia Legal region (as defined in the letter to BlackRock) poses a global threat with consequences for its indigenous people, biodiversity, and global climate. For instance, it accounts for the 25% of the carbon that global forests absorb each year.
2020 has just started, but it bears the scars of recent environmental crises. An increased number of environmental activists as well as institutions are calling the financial sector, whose role in shaping the environment in which we live is giant, for greater accountability.
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