Sustainable Finance Lobbying Overview: BlackRock has taken mixed positions on sustainable finance policies in the US, Europe, and globally. In general, BlackRock has stated top-line support for sustainable finance regulation while taking more mixed and negative positions when engaging with specific policies.

Top-Line Messaging on Sustainable Finance Policy: BlackRock has stated support for action to limit global temperature rise to 1.5C and in 2021 BlackRock joined the Net Zero Asset Managers initiative. CEO Larry Fink has advocated for urgent action on climate change in line with the Paris Agreement in opinion pieces and in his 2021 letter to CEOs, but has also argued for a continued role for greenhouse gas emission-intense investments and suggested that fossil fuels will be “with us for another 100 years.” In comments to the UK House of Commons in 2022, BlackRock appeared to oppose the IEA’s net zero scenario which calls for no new investment in fossil fuels. BlackRock has stated support for the European Commission’s Renewed Sustainable Finance Strategy and the UK’s Green Finance Strategy, as well as broad efforts by policymakers to “advance sustainable finance.” In his 2022 letter to CEOs, Larry Fink called on governments to advance sustainable finance policies.

Position on Regulated Corporate ESG Disclosure: BlackRock has taken mixed positions on ESG disclosure policies, and its engagement has evolved since 2019. In consultations by the European Commission’s Technical Expert Group (TEG) and the UK’s Financial Conduct Authority (FCA), both in 2019, BlackRock argued against a mandatory regulatory approach. Since 2020, BlackRock has supported the need for some kind of regulated corporate ESG disclosure, while objecting to specific provisions in proposed disclosure policies.

In 2020 consultations by the FCA and the UK’s Department for Work and Pensions (DWP), BlackRock supported mandatory implementation of the TCFD. In 2021 comments to the US Securities and Exchange Commission (SEC), BlackRock strongly supported mandatory climate disclosures for both public and private markets. However, after the SEC released its proposed climate disclosure rule in 2022, BlackRock expressed concern with several of the rule’s provisions including Scope 3 emissions disclosure and financial statements disclosure requirements. BlackRock also advocated for increased flexibility in climate disclosure standards, including Scope 3 emissions disclosure requirements, in 2022 comments to the International Sustainability Standards Board and the European Financial Reporting Advisory Group. CEO Larry Fink has been vocal in his calls for regulated corporate ESG disclosure and mandatory implementation of the TCFD, advocating this position in a speech at the 2020 Green Horizon Summit, his 2021 letter to shareholders, and his 2021 and 2022 letters to CEOs.

Position on Taxonomies and ESG Standards/Labels/Benchmarks: In 2020 comments to the European Commission, BlackRock stated support for the EU Taxonomy Regulation but in a white paper from the same year, BlackRock argued against prescriptive definitions of sustainability in the Taxonomy. A media article from 2022 suggested that BlackRock would not support gas being considered “green” in the EU Taxonomy, but in other media from 2022, CEO Larry Fink stated support for the labeling of gas as “green” in the Taxonomy.

On its website BlackRock has stated top-line support for the need for policy on ESG labels and standards but has taken a more mixed position on specific policies. In feedback to the European Commission in January 2019, BlackRock suggested an unambitious threshold of 25% of green activities for a portfolio or company to be considered green. However, in May 2019, BlackRock revised this position to support the proposed 70% threshold, while still advocating for flexibility in labeling. In feedback to the TEG in March 2019, BlackRock supported many aspects of the EU Green Bond Standard including strong requirements on issuer disclosure, but in later feedback to the TEG in July 2019, BlackRock disagreed with most of the minimum proposed standards for the EU’s climate benchmarks. In 2022 comments to the Monetary Authority of Singapore, BlackRock did not support a proposed 70% sustainable asset threshold for a fund to be categorized as an ESG Fund and in comments to the SEC also in 2022, BlackRock supported narrower definitions for proposed ESG-related fund categories.

Position on Incorporating ESG Factors Into Investor Duties: In its 2021 report detailing regulatory developments in Europe, BlackRock stated support for changes to MiFID to include ESG factors in investor duties, support for the EU’s Sustainable Finance Disclosure Regulation (SFDR), and support for the efforts of the DWP to require large pension schemes to integrate climate considerations into their operations. It reiterated this support in its 2022 midyear update. In its 2021 letter to IOSCO, however, BlackRock cautioned against overly prescriptive policies to integrate ESG into investor duties. In 2020, BlackRock did not support Department of Labor rules that sought to limit ESG investing and shareholder rights. BlackRock supported the 2021 reversal of these rules but asked for the language guiding ESG considerations to be made less stringent. In 2022 comments to the DWP, BlackRock supported policy on climate and investment reporting by pension trustees but advocated for a delay in implementation. In comments to the SEC, also in 2022, BlackRock outlined several concerns with the Commission’s proposed ESG disclosure requirements for investment advisers and investment companies.

BlackRock has expressed concern with efforts that seek to limit ESG investing in the US. BlackRock’s corporate website states that efforts to restrict certain investment choices are “bad for workers and retirees,” and in a 2022 letter to state attorneys general, BlackRock wrote that it was “disturbed” by emerging efforts to limit ESG investing. BlackRock has objected to anti-ESG policies in Texas and Florida, characterizing the efforts as “anti-competitive” and “jeopardiz{ing} returns.”

Position on Incorporating ESG Factors Into Risk Management/Prudential Regulation: In the 2021 Forum on Banking Supervision, a BlackRock Managing Director stated support for incorporating ESG factors into risk management and developing methodologies and risk frameworks, but cautioned against adopting a one-size-fits-all approach. In a 2021 paper BlackRock mentioned possible future regulation to incorporate climate into risk management and regulation, but did not take a clear position.

Industry Association Governance: BlackRock has disclosed some of its trade association membership but has omitted mention of other member associations including non-US associations like the Association for Financial Markets in Europe and EFAMA. BlackRock has given little detail on the sustainable finance policy positions of these associations or any actions taken to address misalignment.