Blackrock, the world’s largest asset manager, has withdrawn from a major UN-sponsored climate initiative. The move, explained to clients by Vice Chairman Philipp Hildebrand, signals a significant shift for the company once at the forefront of ESG investing.
Blackrock has formally exited the Net Zero Asset Managers initiative, a global coalition of asset managers committed to achieving net-zero greenhouse gas emissions by 2050. Just days before, J.P. Morgan had announced to leave the organization, as reported by finews.asia.
The decision was communicated in a letter to clients, penned by Philipp Hildebrand, a former head of the Swiss National Bank and now a key figure in Blackrock's leadership: «Our memberships in some of these organizations have caused confusion regarding Blackrock’s practices and subjected us to legal inquiries from various public officials,» Hildebrand wrote in the letter, as reported by «The Wall Street Journal» (article behind paywall).
Legal and Political Pressures
The withdrawal marks a notable retreat from Blackrock's earlier environmental, social, and governance (ESG) commitments. CEO Larry Fink had championed ESG principles, famously declaring in 2020 that «climate risk is investment risk.»
However, a growing backlash from conservative groups in the U.S., including lawsuits from states like Texas and Oklahoma, accused Blackrock of breaching its fiduciary duties by prioritizing climate initiatives. President-elect Donald Trump has previously dismissed climate change as a «hoax» and is expected to dismantle related policies, reshaping the landscape for corporate climate commitments.
Shifting ESG Strategy
Despite its exit, Blackrock remains a major player in sustainable investing, managing over 1 trillion dollars in sustainable and transition-related investments. «In 2024, our platform crossed $1 trillion of client AUM, increasing approximately 850 percent over the last five years, making it the largest in the industry,» a company spokesperson stated.
The firm’s withdrawal follows a broader trend among financial giants. Competitor Vanguard left the same initiative in late 2022, while several U.S. megabanks have recently exited similar coalitions.
Continued Emphasis
The trend reflects mounting scrutiny and a pivot away from ESG commitments as regulatory expectations shift under the incoming Trump administration, which has signaled a rollback of climate-related regulations.
However, Blackrock's continued emphasis on sustainable investment solutions suggests it remains committed to addressing climate risks – albeit on its terms.
