(Bloomberg) — Facing an uprising from fossil-fuel interests on the right and advocates fighting carbon emissions on the left, Larry Fink is making a personal effort to manage climate-change politics.
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In recent weeks, the BlackRock Inc. chief executive officer has sought out private meetings with senior representatives from both cohorts as the world’s largest asset manager — with about $10 trillion of client money — faces intense scrutiny over its views on the environment.
Fink and other BlackRock managers held a virtual meeting in late January with more than a dozen executives from the world’s biggest oil and energy companies, including Chevron Corp., Shell Plc, Exxon Mobil Corp. and TotalEnergies SE, according to people with knowledge of the matter. It was BlackRock’s first roundtable in years with the industry, and it was called specifically to discuss climate change, the people said.
That followed a private gathering on the sidelines of the United Nations COP26 climate conference in Glasgow, Scotland, where civil-society groups met with Fink and Paul Bodnar, BlackRock’s senior executive for sustainability, said one of the people, who declined to identify the organizations that participated.
“These engagements are critical to understanding the historic transformation of the global economy that we are helping our clients navigate,” Brian Beades, a spokesman for the New York-based firm, said in a statement, declining to elaborate on the meetings.
Exxon, Shell and TotalEnergies declined to comment.
“While we wouldn’t discuss details, we regularly engage with shareholders in constructive dialog and look forward to discussing future plans at our investor day next month,” Chevron said in a statement.
As the steward of more than $3 trillion in exchange-traded funds that are often tied to broad market indexes, BlackRock is among the top shareholders of oil and gas companies. It controls stakes of more than 6% in Exxon, Chevron and TotalEnergies, according to data compiled by Bloomberg.
BlackRock has positioned itself as one of Wall Street’s most vocal advocates for sustainable investing. Fink, 69, has used his annual letters to corporate CEOs to press them to respond to climate change, and his firm has recently argued that ignoring the transition to a world of net-zero carbon emissions “is no longer an option.”
Fink, in recent speeches and letters, has sought to further spell out his position that efforts to combat climate change will take decades, and that fossil fuels such as natural gas will continue to be important sources of energy during the transition to net-zero. Last week, BlackRock told clients that investing in oil and gas companies with plans to reduce their carbon emissions is an “under-appreciated opportunity” for investors.
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Working with oil and gas companies is important to help develop decarbonization technologies and BlackRock, which oversees more than $500 billion in sustainable investments, doesn’t have a policy of divestment, Fink has said. BlackRock also has said that fossil-fuel exploration remains a necessary pursuit, at least for now, and Fink warned in a July speech that surging oil prices could threaten the transition to net-zero, as that will result in a greater dependence on coal in some emerging economies.
“Investment in fossil fuel and energy-intensive sectors will be needed to enable the transition, in our view, even in ambitious scenarios to reach net zero by 2050,” BlackRock Vice Chairman Philipp Hildebrand and Mark Wiedman, the head of international and corporate strategy, said in a presentation last week.
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Republican lawmakers in oil-rich Texas have threatened to restrict BlackRock from managing pension money, arguing that the firm’s embrace of environmental, social and governance investing principles threatens oil companies in the state. Senior BlackRock executives have recently met with officials in Texas, as well as trade associations for oil and gas producers there, and the firm has hired lobbyists in Austin, the state capital.
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