BlackRock has become the latest organization to abandon United Nations-affiliated climate initiatives after recent pressure from Attorney General Ken Paxton.
The world’s largest asset manager revealed Thursday that it was leaving the Net-Zero Asset Managers initiative, which aims to get asset managers to “commit to a goal of net zero emissions in order to mitigate financial risk and to maximise long-term value of assets.”
In a letter to clients, BlackRock Vice Chairman Philipp Hildebrand and Helen Lees-Jones, global head of sustainable and transition solutions, denied that NZAM’s environmental and social governance policies impacted the firm’s portfolio management.
“Therefore, our departure doesn’t change the way we develop products and solutions for clients or how we manage their portfolios,” stated Hildebrand and Lees-Jones.
With BlackRock leaving, State Street is the last of the largest asset managers in the U.S. to remain in the alliance. Vanguard decided to leave NZAM in 2022 but said they would still help investors “navigate the risks that climate change can pose to their long-term returns.”
NZAM boasts more than 325 signatories and has $57.5 trillion in assets under management. The U.N. launched it in December 2020, and it eventually became a part of the broader Glasgow Financial Alliance for Net Zero.
GFANZ, founded after the 2021 United Nations Climate Change Conference, is “an alliance of over 500 firms across 45 countries that control $130 trillion in assets” and pushes ESG policies.
Earlier this week, JPMorgan announced it was leaving another GFANZ-affiliated organization—the Net-Zero Banking Alliance. Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, and Citigroup have also left the NZBA over the past month.
Paxton declared victory on Tuesday following the slate of banks leaving. His office was reviewing four of them—Bank of America, JPMorgan, Morgan Stanley, and Wells Fargo—for their compliance with Senate Bill 13. Since they announced their departure, he has closed the review of the four.
Passed in 2021, SB 13 prohibits governmental entities operating in Texas from contracting with companies that boycott oil and gas companies—a common result of ESG policies.
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