The world’s biggest money manager, with US$5.1 trillion under administration, may be about to send shock waves through the private investment community by moving to address the financial risks of climate change.
In two separate statements, BlackRock Inc. announced its support for the work of the Task Force on Climate-Related Financial Disclosures, and stated that “studying the disclosure of climate change risks, including physical risks like rising waters and government policies to cap greenhouse gas emissions,” will be one of its priorities for 2017, states an E&E News report picked up by the Institute for Energy Economic and Financial Analysis.
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“Climate risk awareness and engagement has advanced over the past several years, and just as our thinking on climate risk continues to evolve, we believe that companies are also increasingly more aware of its business relevance,” BlackRock states in a new company policy.
“For directors of companies in sectors that are significantly exposed to climate risk, the expectation will be for the whole board to have demonstrable fluency in how climate risk affects the business and management’s approach to adapting and mitigating the risk,” the policy adds. “We will consider voting in favour of proposals that would address our concern.”
Tim Smith of Walden Asset Management, a Boston-based investment group that had advocated for the BlackRock policy through a shareholder proposal, said the announcement sends “an exceedingly important message.” Now, he added, “we are hopeful that BlackRock’s announcement and its engagement on climate risk will also result in active support for shareholder resolutions on climate change.”