Investment company BlackRock announced that it exited the United Nations-supported Net Zero Asset Managers Initiative (NZAMI).
The NZAMI is an international group of asset managers supporting the “global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner,” according to its website. The coalition has more than 325 signatories managing more than $57.5 trillion.
In a letter sent to clients, the company said its memberships with climate-centered organizations have “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials.” Its departure from NZAMI “does not change the way we develop products and solutions for clients or how we manage their portfolios.”
BlackRock, as well as financial entities Vanguard and State Street, were sued by eleven Republican states in November for “illegally conspiring to manipulate energy markets,” Texas Attorney General Ken Paxton said at the time.
According to the complaint, each financial entity had a significant stake in multiple coal companies. The lawsuit alleged that the firms had an “output-reduction syndicate” that led to “supra-competitive profits for themselves and their portfolios,” violating state antitrust laws and Section 1 of the Sherman Act.
“Defendants have publicly defended their anticompetitive scheme with appeals to environmental stewardship,” the filing added.
The Republicans claimed that BlackRock “actively deceiv[ed] investors about the nature of its funds. Rather than inform investors that it would use their shareholdings to advance climate goals, BlackRock consistently and uniformly represented its non-ESG funds would be dedicated solely to enhancing shareholder value.”
BlackRock’s withdrawal from the climate initiative comes as several other major financial companies have also left net-zero alliances. JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs have announced their departures from the Net-Zero Banking Alliance.
