World’s Largest Investor’s Green Credentials Questioned Over Oil Industry Emails | Climate crisis

Emails have revealed the act of eavesdropping by big banks and the world’s largest asset manager, BlackRock, as they privately assuage oil industry concerns over their public support for greener investments.

In his annual letter to chief executives, BlackRock boss Larry Fink said pursuing climate action policies was not about being “woke” but about seeking profits on behalf of customers.

The comments were widely seen as a signal that the asset manager, whose clients entrusted him with $10,000,000,000,000, would use his investment influence to support greener businesses.

But emails – obtained via a freedom of information request by the Bureau of Investigative Journalism and the think tank InfluenceMap – show that an oil-rich Texas regulator left a meeting with BlackRock thinking that the company had changed its mind.

After the meeting with BlackRock staff, on January 7, 2022, Texas Petroleum Regulator Chairman Wayne Christian wrote to the company to express his relief.

He said he had been concerned about the asset manager’s promotion of investments governed by environmental and social (ESG) guidelines, which typically involve the sale of oil and gas stocks.

He said it was “nice to hear that BlackRock didn’t mean – or no longer believe – many of the nasty things the company and … Mr. Fink have said about the oil and gas industry. “.

In an attached letter, Christian said BlackRock staff had referenced “media misrepresentations” about its environmental stance and also said they were “supportive” of the oil and gas industry.

Responding to Christian, a BlackRock employee did not question his interpretation of the discussion but pointed to Fink’s comments, saying ‘traditional’ energy companies were ‘part of the solution’ alongside investment policies. environmental.

BlackRock said there was no contradiction between its public statements and its private conversations with Christian.

“BlackRock has been clear and consistent since January 2020 that climate risk is an investment risk that will impact investors’ portfolio returns as companies manage both the physical and transition risk associated with climate change. weather.

“Our investment belief is that sustainable and climate-integrated portfolios can deliver better risk-adjusted returns to our clients.

“Furthermore, BlackRock has long asserted that energy companies play an important role in the global economy and in a successful transition.

“We plan to remain long-term investors in carbon-intensive sectors. We are not pursuing broad divestment from sectors and industries as a policy.

But Anusha Narayanan, climate campaign manager at Greenpeace USA, said it looked like BlackRock was “trying to get its cake and eat it”.

“We need to stop falling into this false choice between a healthy planet or a healthy economy. Fossil fuels give us neither. Last week’s IPCC report made it clear that climate change is already causing massive damage and loss to people and ecosystems around the world, with increasingly irreversible consequences.

“Financial regulators are calling the climate crisis an emerging threat to the stability of the US financial system.

“For companies like BlackRock, investing in a zero-carbon future must mean immediate divestment from coal, oil and gas.”

While BlackRock has drawn the line between greener investments and staying on the right side of oil industry advocates, U.S. banks have faced similar pressure from oil-rich states, seemingly forcing a change in policy. politics in one case.

In November, treasurers from 15 U.S. states — responsible for more than $600 billion in funds — wrote an open letter to the banking industry threatening to pull out of financial institutions that boycott fossil fuel companies.

A second freedom of information request shows that US Bank wrote to the West Virginia state treasurer, who coordinated the letter, saying it hoped to maintain its relationship with the state, a major producer. coal, for many years to come.

In a note, Tim Rieder, senior vice president of US Bank, added: “Personally, I totally agree with the [treasurers’] letter.”

The US Bank subsequently appeared to change its investment policy, removing its promise to boycott coal investments.

The U.S. bank said it had not changed its policy under pressure from U.S. states and its investment policy had not banned coal-fired power financing since October 2020.

However, its 2021 Environmental Responsibility Policy, posted on the bank’s website until last week, prohibited US Bank from financing coal-fired power.

A host of other banks also reassured Texas, after it implemented a law requiring financial institutions to certify that they are not boycotting energy companies in order to remain eligible to do business with the state.

Barclays, Citigroup, UBS and Wells Fargo were among the 39 institutions that signed up.

Barclays said: “We are aligning our entire funding portfolio with the objectives and timelines of the Paris [climate] agreement, on track to become a net zero bank by 2050.”

UBS said it supported the goals of the Paris Agreement and added: “We consider engagement with companies across all sectors to be fundamental to any approach to sustainable investing.”

Citigroup said, “Our policies are focused on managing the energy transition responsibly, not on boycotting the energy sector. This position has been consistently communicated to all of our stakeholders.

Wells Fargo declined to comment.