A rapid shift away from fossil fuels would risk ‘extraordinary’ UK job losses, the boss of the world’s biggest asset manager has warned.
Larry Fink, chief executive of Blackrock, has been pushing the companies he invests in to outline how they will strive for a greener economy.
But he said investors like Blackrock could not simply pull their money out of firms that were still working towards the goal of net zero carbon emissions.
A sign of the times: Blackrock manages around £6.6trillion on behalf of pension funds and savers
He told the BBC: ‘If we all ran away from the hydrocarbons and everything, and if you ran away with most of those companies in the FTSE [100], the job loss in the United Kingdom would be extraordinary. Is that the outcome that they want?’
The FTSE 100 index of Britain’s leading companies is particularly heavily weighted towards the energy and mining sector, containing giants such as Shell, BP and Glencore.
Blackrock manages around £6.6trillion on behalf of pension funds and savers. Much of their money is invested through Blackrock’s range of passive funds – those which are not actively managed by a stock-picker, but which track an index such as the FTSE100.
Fink said: ‘We’re not going to sell assets in index funds. But we have the power of the vote on behalf of our investors. ‘We can help companies move forward and that’s what we try and do.’
In his annual letter to company bosses earlier this week, Fink wrote: ‘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.’
However, many environmental campaigners claim that the financial sector is not doing enough to help combat climate change, and state investors should be more selective about where they put their money.
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