BlackRock fossil fuel investments create losses

The Institute for Energy Economics and Financial Analysis (IEEFA) estimated roughly $90bn in losses for BlackRock’s investors over the last decade, with 75 per cent of those losses due to BlackRock’s investments in ExxonMobil, Chevron, Royal Dutch Shell and BP. The IEEFA reported that despite BlackRock’s claims of commitment to sustainable investing, only 0.8 per cent of the company’s total portfolio is invested in environmental, social and governance (ESG) funds. Some of the losses are reported to be a direct result of the bankruptcy of coal and fossil fuel businesses like Peabody Energy, Cloud Peak Energy and General Electric, all of which received BlackRock investments.

BlackRock has received criticism regarding its investments into non-renewable energy producers, especially in light of recent acquisitions of ESG-oriented risk-assessment, analysis and sustainable investment groups by other investing firms like Schroders, and credit rating businesses like Moody’s Investors Service. Tim Buckley, the IEEFA’s Director of Energy Finance Studies and co-author of the report criticised BlackRock for its lack of industry leadership in the direction of a transition to clean energy.

Despite developments in the clean energy sectors of historically fossil fuel-based companies like BP, who plans to expand its solar energy capabilities in Brazil and its electric vehicle charging station infrastructure in China, the lack of a diversified investment portfolio appears to be an obstacle for BlackRock, and could continue to cause further losses if left unaddressed.

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