BlackRock, the world’s largest asset manager, has announced its withdrawal from the Net Zero Asset Managers Initiative (NZAMI). This decision follows mounting political scrutiny from Republican lawmakers, marking another significant departure of a Wall Street giant from climate-focused investor groups.
Managing $11.5 trillion in assets, BlackRock joined NZAMI to align with its clients’ commitment to reducing greenhouse gas emissions. However, the firm cited “confusion regarding BlackRock’s practices” and legal inquiries from public officials as reasons for its exit.
“Our active portfolio managers continue to assess material climate-related risks,” BlackRock assured in a letter to clients, emphasising that the departure would not impact its product offerings or portfolio management strategies.
NZAMI, which includes over 325 signatories managing $57.5 trillion, aims to support the global net-zero emissions target by 2050, leveraging tools like proxy voting at corporate meetings.
BlackRock’s move reflects a broader trend among US financial institutions. Several major banks, including JPMorgan Chase, Morgan Stanley, and Bank of America, have recently withdrawn from the Net Zero Banking Alliance (NZBA). These decisions, spurred by legal risks and political pressures, highlights the growing challenges climate-focused coalitions face in the US.
The Republican-led US House Judiciary Committee requested information in December from BlackRock and other NZAMI members, alleging their activism drove up energy costs.
In November, BlackRock and other asset managers faced lawsuits from Texas and 10 Republican-led states, accusing them of reducing coal production and increasing energy prices. While BlackRock denied any wrongdoing, the lawsuits have added to the political headwinds facing climate alliances.
Judiciary Committee Chairman Jim Jordan celebrated BlackRock’s departure, calling it “a huge win for freedom and American prosperity” and urging other financial institutions to abandon what he described as “woke ESG policies.”
Despite BlackRock’s withdrawal, rivals like State Street and JPMorgan’s asset management arm remain committed to NZAMI. Vanguard, however, left the initiative in 2022.
An NZAMI spokesperson expressed disappointment, stating, “Climate risk is financial risk. NZAMI exists to help investors address these risks and realise the benefits of transitioning to a net-zero economy.”
Leslie Samuelrich, president of Green Century Funds, described the recent departures as “disheartening,” particularly from influential firms. “This is short-sighted given the stark realities of climate change and the need to push for environmentally responsible actions in corporate America,” she remarked.
Despite leaving NZAMI, BlackRock reaffirmed its dedication to sustainable investments. The firm described the energy transition as a “mega force shaping economies and markets” and stated its efforts remain “driven by the needs of our clients.”
