Net zero a fiduciary responsibility: BlackRock
In its annual letters to chief executive officers (CEOs) and clients, BlackRock has highlighted improvements made in environmental, social and governance (ESG) commitments made in the previous year.
BlackRock CEO Larry Fink released his annual letter last year, where he said the firm would divest from coal and it had taken numerous steps in environmental, social and governance (ESG) compliance.
In this year’s letter to CEOs, Fink said as a fiduciary to clients, it had a responsibility to advocate on their behalf which included action on climate change.
He said as markets began to price climate risk into the value of securities, it would spark a fundamental reallocation of capital.
“Then the pandemic took hold – and in March, the conventional wisdom was the crisis would divert attention from climate,” Fink said.
“But just the opposite took place, and the reallocation of capital accelerated even faster than I anticipated.”
As well as a shift in investor behaviour, Fink said last year was a landmark year in regards to policy change.
“In 2020, the EU, China, Japan, and South Korea all made historic commitments to achieve net zero emissions,” Fink said.
“With the US commitment last week to re-join the Paris Agreement, 127 governments – responsible for more than 60% of global emissions – are considering or already implementing commitments to net zero.
“Momentum continues to build, and in 2021 it will accelerate – with dramatic implications for the global economy.”
Fink said it was a reminder about how the biggest crises – whether it was environmental or medical – required an ambitious response.
“I believe that the pandemic has presented such an existential crisis – such a stark reminder of our fragility – that it has driven us to confront the global threat of climate change more forcefully and to consider how, like the pandemic, it will alter our lives,” Fink said.
According to FE Analytics, the BlackRock funds with the best return during 2020 were iShares MSCI South Korea ETF (26.85%), iShares Asia 50 ETF (21.76%) and Global Allocation (14.55%).
The worst-performing were Style Advantage (-22.6%), Global Listed Infrastructure (-8.18%) and iShares Edge MSCI World Minimum Volatility ETF (-6.15%).
Best and worst BlackRock funds during 2020
AUTHOR
Chris Dastoor
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