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Large Finance Firms Tell UK They’ll Keep Funding Fossil Fuel Projects

blackrock headquarters

Some of the world’s biggest financial firms including BlackRock Inc. and Vanguard Group Inc. have told the UK they have no plans to halt the financing of new fossil-fuel supplies, in response to a list of questions sent by British lawmakers tasked with figuring out how the country can meet its own net-zero obligations. [bold, links added]

The inquiry is being led by the Environmental Audit Committee of the House of Commons. Britain, which was successfully sued by a group of climate activists earlier this year for putting forward an unclear net-zero plan, has asked firms to explain how they’re incorporating science-based requirements to phase out and ultimately halt the financing of new fossil-fuel supply, according to a statement published on Tuesday.

The Committee expects the finance sector “will play a significant role in helping determine whether the UK Government’s carbon budgets and its net zero targets are likely to be met,” it said.

Responses, which weren’t summarized by the Committee, were sent by more than 30 of the world’s biggest banks and investment managers.

BlackRock underlined that it is “obligated to always act in our client’s financial best interests,” in its response.

The firm also said its overall approach to the energy transition doesn’t include fossil-fuel exclusion policies, and that it doesn’t support the International Energy Agency’s net-zero scenario, which calls for no investment in new fossil-fuel supplies.

BlackRock’s goal “is not to engineer a specific decarbonization outcome in the real economy,” it said.

And, like the other firms surveyed, BlackRock said it’s the role of governments to set targets for private-sector actors.

The asset manager also said it expects to remain a long-term investor in carbon-intensive sectors “on behalf of our clients.”

Vanguard provided a similar response, saying it “does not dictate strategy and operations in portfolio companies, and therefore does not have an enterprise view of the IEA net-zero scenario and its recommendations for ‘no new investment.”’

The UK initiative to gather responses comes less than a month before world leaders are set to gather for the COP27 climate summit in Egypt.

h/t RO

Read rest at Bloomberg

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