BlackRock, the world's largest investor, has lost an estimated $ 90 billion over the past decade by ignoring the serious financial risk of investing in fossil fuel companies, according to economists.
A report from the Institute for Energy Economics and Financial Analysis (IEEFA) found that BlackRock has eroded the value of the $ 6.5 tn fund by investing in oil companies that have fallen in value and by missing out on pure growth energy investments.
The report found that BlackRock's multi-billion dollar Investments in the world's largest oil companies ̵[ads1]1; including ExxonMobil, Chevron, Shell and BP – were responsible for the bulk of the losses.
The fund was also plunged by the collapse of major US fossil fuel companies, including General Electric, and the coal mining company Peabody.
BlackRock is facing growing pressure to dispose of fossil fuels by investors and environmental groups, who have accused the property manager of dragging their feet to the climate crisis.
Tim Buckley, director at IEEFA and co-author of the report, told BlackRock's huge financial booklet that it should take responsibility for leading the climate crisis.
The mega fund is larger than the economy of Japan, the third largest economy in the world, making it the largest investor in the global coal industry and one of the three largest investors in most major oil companies.
“BlackRock exerts a tremendous amount of influence and incurs great responsibility to the wider community. It has the power to lead globally to address climate risk, but to this day it is still a hinge, "Buckley said.
The report follows a strong warning from the Bank of England about" significant risks to the economy and to the financial system "
The Bank has estimated that investments worth $ 20 million could be "stranded" as the authorities set more ambitious climate targets.
BlackRock has denied responsibility for its fossil fuel investments because the majority
IEEFA has used the report to encourage BlackRock to propose a separate benchmark index for the passive funds to avoid risking customer investments.
19659002] It has also asked the fund to appoint a new independent chairman and revamp the 18-strong board , who are six members former managers of comp anies with close ties to the fossil fuel industry.
A spokesperson for BlackRock said the fund offered clients the opportunity to invest in environmentally and socially responsible funds as well. These funds represented 0.8% of BlackRock's total portfolio.