February 26, 2020

Van Hollen, Warren, Whitehouse, Booker Call On BlackRock CEO Larry Fink to Endorse the Climate Risk Disclosure Act in Light of His Public Climate Commitments

United States Senators Chris Van Hollen (D-Md.), Elizabeth Warren (D-Mass.), Sheldon Whitehouse (D-R.I.), and Cory A. Booker (D-N.J.) sent a letter to BlackRock CEO Larry Fink urging him to endorse the Climate Risk Disclosure Act after Mr. Fink publicly announced that BlackRock will "make investment decisions with environmental sustainability as a core goal" and committed to release climate disclosures for the investment firm's mutual funds.

In recent letters to BlackRock's clients and corporate executives, Mr. Fink acknowledged the threats and opportunities that come from climate change and described how it will affect BlackRock's investment decisions. In his annual letter to clients, Mr. Fink wrote that he was "making sustainability integral to the way BlackRock manages risk, constructs portfolios, designs products, and engages with companies," because he sees climate risk as material to how their investments will perform. In a separate letter to CEOs, he added that climate change also presents an opportunity for investors who seek out climate resilient companies or companies poised to benefit from a climate transition. Mr. Fink also committed to release climate disclosures for Blackrock's mutual funds.

In light of these commitments, the senators urged Mr. Fink to endorse the Climate Risk Disclosure Act and require companies in which the firm invests to provide disclosures consistent with the legislation. These disclosures would include:

  • The company's direct and indirect greenhouse gas emissions;
  • The total amount of assets related to fossil fuel that the company owns or manages;
  • How the company's valuation would be affected if climate change continues at its current pace or if policymakers successfully restrict greenhouse gas emissions to meet the 1.5 degrees Celsius above pre-industrial levels goal; and
  • The company's risk management strategies related to the physical and transition risks posed by the climate crisis.

"Your letters to CEOs and investors suggest that you understand the extent of the effects that climate change will have on the economy, and that BlackRock, as a fiduciary to your clients needs to understand climate risks across the investments it makes," the senators wrote in their letter. "If BlackRock plans to live up to the commitments you made, we hope that you will go further by endorsing the reforms laid out in the Climate Risk Disclosure Act, and require companies in which you invest to issue public disclosures consistent with its requirements."

The senators also asked Mr. Fink to detail any concrete steps that BlackRock is already taking to meet its commitments. They requested a response to their inquiry by March 17, 2020.

More information on the Climate Risk Disclosure Act is available here. The full text of the letter is available here.