BlackRock, the worlds largest investment fund management firm, is putting £5.3 trillion in assets at ‘serious financial risk’ through continued investment in the oil and gas sector, a new report has claimed.
The study by the Institute for Energy Economics and Financial Analysis (IEEFA) found that Blackrock has already wiped £75 billion of investor capital off its balance sheet.
The IEEFA said the firm has “failed to effectively address risk” from a small number of oil and gas interests, which has resulted in losing investors billions.
BlackRock holds more capital value than Japan, the third largest economy in the world.
Tim Buckley, IEEFA director of energy finance studies and co-author of the report, urged Blackrock to “demonstrate stronger leadership” for other funds to follow.
He said: “As the world’s largest universal owner, BlackRock wields an enormous amount of influence and shoulders a huge responsibility to the wider community.
“It has the power to lead globally to address climate risk, yet to-date it remains a laggard.”
Mr Buckley said BlackRock is continuing to invest despite signals from other investment groups, such as the Norwegian sovereign wealth fund’s total divestment from the oil and gas industry.
He added: “If the world’s largest investor makes it clear the rules have changed then other globally significant investors like Fidelity, Vanguard and Japan’s sovereign wealth fund will rapidly replicate and reinforce these moves, reducing stranded asset risks for all.”
Tom Sanzillo, IEEFA co-author of the report and former first deputy comptroller of New York State, also accuses BlackRock of “systematically” failing to protect investors by not changing the course of investment.
He said: “BlackRock is both behind the curve on coal and in reading the energy transition.
“How many more examples of value destruction will it take, how many more years of fossil fuel companies lagging the world markets will it take before BlackRock leads?”
“A diversified portfolio is not an excuse to lose money.”