https://www.axios.

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Ben GemanJan 15, 2020

The limits of BlackRock's new climate

strategy

Laurence D. Fink, chairman and C.E.O. in 2018. Photo: Michael Cohen/Getty Images for
The New York Times
BlackRock's climate strategy rolled out Tuesday won't leave anyone confusing the
asset management giant with Greenpeace, despite the suite of big new pledges.

Driving the news: Take the plan to dump producers of thermal coal — the stuff
used in power plants — from their active portfolios.

 It targets companies that generate more than 25% of their revenue from

thermal coal.
 But Bloomberg points out that "large, diversified miners — which also
rank among the largest coal producers — won’t be affected."
 Coal revenue for mining heavyweights Glencore, Anglo American and
BHP Group are all under the 25% threshold, Bloomberg notes.

But, but, but: A new update from the Institute for Energy Economics and
Financial Analysis says BlackRock's coal policy is nonetheless consequential.

 They note it would likely capture firms including China Shenhua, China
National Coal, Peabody Energy, Arch Coal Inc., Contura Energy, Adani
Enterprises and many others.
 And, they note, BlackRock's vow to "closely scrutinize" companies that use
lots of thermal coal could bring divestment from big power companies like
Duke Energy.

The big picture: Most of the trillions of dollars BlackRock manages for clients are
in passive funds, which means the company isn't directly picking the investments.

 Nonetheless, BlackRock's strategy does address passive investment vehicles.

The firm is expanding offerings of sustainability-focused exchange-traded
funds.
 Part of that plan would allow clients to select funds that do not include
certain companies and sectors, including a "fossil fuel screen."
The bottom line: Environmentalists generally applauded BlackRock's moves but
also acknowledged their limits.

 As the NYT notes, "Because of its sheer size, BlackRock will remain one of
the world’s largest investors in fossil-fuel companies."

Go deeper: BlackRock vows focus on climate change