- Sen. Elizabeth Warren wants Blackrock's Larry Fink to put more force behind his pledge to have the world's largest money manager to tackle climate change, and to detail how he expects to do it.
- In a letter made public Wednesday, Warren asks Fink to support her Climate Risk Disclosure Act, which requires companies to disclose their climate-related risk.
- Warren also pushed Fink to better explain how he will back up his promises of making sustainability "the new standard for investing."
In a letter made public Wednesday, Warren, D-Mass., asks Fink to support her Climate Risk Disclosure Act, which requires companies to reveal their climate-related risk. Warren is one of a number of advocates who believe creating clear, public measuring sticks is one of the only ways to hold companies accountable to their pledges of sustainability.
Warren also pushed Fink to better explain how he will back up his promises of making sustainability "the new standard for investing." She asked him to describe the "concrete steps" BlackRock will take to meet its commitments and any changes in management or policies it plans to implement to support it.
She asked that Fink describe BlackRock's definition of exchange-traded funds with a focus on environmental, social and governance, or ESG, issues. He pledged to double BlackRock's offerings of ESG-themed products. These funds have drawn scrutiny for including companies seemingly at odds with their objective, like fossil fuel companies.
The letter, dated Tuesday, comes days ahead of Super Tuesday, in which Warren will fight for delegates in her run to be the Democratic nominee in the presidential election. Among the 14 states voting on Tuesday is California, which has been plagued by environmental disasters such as wildfires that experts have blamed on climate change.
Fink announced in January that BlackRock will exit investments with a high sustainability-related risk, such as coal. He attributed the decision to "a fundamental reshaping of finance" and warned that climate change is a "defining factor in companies' long-term prospects." He also said BlackRock will join the Climate Action 100+ investor coalition, which focuses on tackling greenhouse gas.
The move followed criticism of the money manager from activists who argued that its investments in coal were at odds with the societal focus Fink puts forward in his highly publicized annual investor letter. BlackRock has voted against every single resolution backed by the Climate Action 100+ investor coalition to tackle greenhouse gas.
"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," wrote Warren, along with Sens. Sheldon Whitehouse, D-R.I, Cory Booker, D-N.J., and Chris Van Hollen, D-Md.
"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," she added.
A spokesperson for BlackRock told CNBC that the firm is reviewing the letter.
Warren's Climate Risk Disclosure Act, originally announced in 2018 and reintroduced in July, would require every public company to disclose to the Securities and Exchange Commission information about climate risks to business, such as greenhouse gas emissions.
The measure requires fossil fuel companies to release even more detailed reports and pushes firms to switch more quickly to cleaner and more efficient energy sources.
Warren has successfully pushed for other SEC disclosure measures. A Dodd-Frank rule requiring the SEC to adopt rules that force disclosure of the CEO-to-worker pay ratio brought the issue to the forefront in boardrooms, corporate advisors have told CNBC.
— CNBC's Emma Newburger contributed to this report.