BlackRock CEO Says Firm Could Divest if Businesses Don't Pursue Sustainability
The financial sector has been actively working to become more progressive and slow down global warming. Fink made this statement in the firm’s annual shareholder letter.
Specifically, he wants companies to be transparent about how their business models will be sustainable and limit global warming to no more than 2 degrees Celsius above preindustrial averages. He also wants companies to eliminate greenhouse gas emissions by 2050.
“Investors cannot prepare their portfolios for this transition unless they understand how each and every company is prepared both for the physical threats of climate change and the global economy’s transition to net zero. They are asking managers like BlackRock to accelerate our data and analysis capabilities in this area — and we are committed to meeting their needs,” said Fink.
This would require companies to reevaluate their business models and get them approved by board members. BlackRock will also take action on its own behalf by incorporating a “heightened-scrutiny model” for its actively managed funds to ensure that companies with climate risk are subject to a “potential exit.”