ESG Round-Up: BlackRock expects to remain long-term investor in carbon intensive sectors, following criticism

The latest developments in sustainable finance: SEC sets date for climate proposal, UK Government to introduce more legislation for pension schemes, Eurosif urges portfolio clarifications.

BlackRock said that it focuses on climate, and financing the transition “not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients,” in an emailed statement to RI. Earlier this week, the world’s largest asset manager was called out after it allegedly downplayed its ESG agenda at a meeting with the chairman of Texas’s oil and gas regulator Wayne Christian. In its statement to RI BlackRock added: “We expect to remain long-term investors in carbon-intensive sectors. We do not pursue broad divestment from sectors and industries as a policy. We are led by our clients and will only ever take action in their best interests, and we believe that carbon-intensive companies that are positioning themselves to lead decarbonization within their industries offer attractive investment opportunities for our clients. In both public and private engagements, including in Texas, BlackRock executives are consistent on these points.” 

The SEC will meet on Monday 21 March to discuss its long-awaited proposal on climate disclosure rules for US public companies, the US regulator announced. “The Commission will consider whether to propose amendments that would enhance and standardise registrants’ climate-related disclosures for investors”, according to a notice published on its website.Earlier in the week, while speaking at a meeting hosted by the Council of Institutional Investors (CII), the SEC’s Division of Corporation Finance Director Renee Jones, said that the number of corporate challenges to shareholder proposals has fallen by 9 percent this year so far. In November, the SEC issued new guidance on how it would interpret several rules underpinning the ‘no action’ process this year. Those rules had been used successfully by companies in recent years to exclude shareholder proposals on ESG themes, particularly climate change, but the new guidance was widely seen as tipping the balance towards investors.  

The UK government will introduce legislation to help pension schemes invest in illiquid assets, the work and pensions secretary Thérèse Coffey has said. While attending the Pensions and Lifetime Savings Association’s ESG conference yesterday 10 March, she also revealed that rules to align trustees’ climate reporting with the goals of the Paris Agreement will come into force on 1 October. Speaking at the same conference, the chair of the All-Party Parliamentary Group for ESG, Alexander Stafford, revealed that the government is preparing to regulate further in order to achieve consistency on ESG standards across the private sector. Speaking separately at the conference, The Pensions Regulator (TPR) has confirmed that it will take a flexible approach amid the first wave of TCFD reports and share examples of best practice later this year, although it noted all schemes could be doing more on climate change issues. 

Eurosif has urged all responsible investors to clarify their investment orientations, in order not to support the direct or indirect financing of the Russian aggression in Ukraine, according to a statement. “These orientations should probably go beyond merely complying with the sanctions imposed,” the pan-European association promoting sustainable finance added while expressing its full support for the economic sanctions implemented by the EU.