Blackrock CEO Larry Fink’s support for fossil fuels criticized

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Larry Fink, CEO of BlackRock Inc.

Christopher Goodney | Bloomberg | Getty Images

BlackRock CEO Larry Fink’s latest annual letter has called the need to decarbonize the global economy the biggest investment opportunity of this generation, but he hasn’t gone far enough in his drive to walk away. oil and gas industries, according to climate activists.

Fink said the global infrastructure of traditional fossil fuel companies is needed to bridge that decarbonized future.

“The transition to net zero is already uneven with different parts of the global economy moving at different speeds. It won’t happen overnight. We need to go through shades of brown to shades of green,” said writes Fink in the annual letter.

“To ensure the continuity of affordable energy supplies during the transition, traditional fossil fuels like natural gas will play an important role both for electricity generation and heating in some regions, as well as for the production of hydrogen. “, he wrote.

BlackRock, which revealed on Friday that it passed $10 trillion in assets under management, does not have a fossil fuel divestiture policy.

Some of BlackRock’s clients are divesting from oil and gas investments altogether, while others are not, Fink said. The world is currently dependent on hydrocarbons, like oil and gas, and “we have to admit that quickly,” he said on CNBC’s “Squawk Box,” responding to a question from host Andrew Ross Sorkin.

According to Fink, an ultimatum for hydrocarbon energy would be counterproductive for the climate movement.

“Any plan that focuses solely on limiting supply and failing to meet demand for hydrocarbons will drive up energy prices for those who can least afford it, leading to greater polarization around change. climate and an erosion of progress,” he wrote in the letter.

But some climate activists reject the idea that greenhouse gas-emitting energy sources have a role to play in the conversation.

“Fink insists on continuing to support dirty fuels like fracking gas and peddles the outdated and dangerous view that gas has a place in the energy transition, despite the scientific consensus that we must stop the expansion of fuels immediately. fossils,” said Ben Cushing, Fossil. -free fundraising campaign director with the Sierra Club, said in a written statement.

Moira Birss, director of climate and finance at environmental organization Amazon Watch, said including fossil fuel companies in a conversation about the energy transition indicates that Fink’s climate talk is insincere.

“Fink apparently wants to be above the political fray, but playing nice with those who profit from the causes of climate change, he is making the political choice to reject climate science, which clearly shows that a rapid transition of all fossil fuels is unquestionably urgent and necessary,” Birss said in a statement.

“His opportunistic argument for supporting fossil gas as part of the green transition is flatly contradicted by climate science,” added Lara Cuvelier, an activist with Reclaim Finance, a nonprofit that argues that the biggest financial institutions of the world should move away from fossil fuels.

“Fink thus provides cover for the construction of dozens of new gas-fired power plants, which would lock us into fossil fuels for years to come. commitment must be accompanied by a clear demand to stop the expansion of fossil fuels,” Cuvelier said in a written statement.

“Given BlackRock’s enormous interests in fossil fuels, this truth may be too inconvenient to bear,” she added.

Sorkin asked BlackRock’s CEO on “Squawk Box” how he decides whether a hydrocarbon company – meaning a company that works with natural gas or crude oil – sees itself as part of the conversations and energy investments in the future.

Fink told Sorkin that blue and green hydrogen technologies need further development, as do technologies to decarbonize steel and cement and cheaply sequester carbon emissions.

Additionally, in his annual letter, Fink said government regulation must play a critical role in the evolution of energy markets. “Companies cannot do this alone, and they cannot be climate police.”

“We need governments to provide clear pathways and a consistent taxonomy for sustainability policy, regulation and market disclosure.”

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