BlackRock’s Climate Activism Has a Passive Problem
Larry Fink is putting the climate emergency at the forefront of his company’s investment strategy. But trillions of dollars of passive money remain unavailable for the fight.
It’s hard to ignore them when they’re camped on your doorstep.
Photographer: Daniel Leal-Olivas/AFP via Getty Images
BlackRock Inc., the world’s biggest fund manager with $7 trillion of assets, says it plans to “place sustainability at the center of our investment approach.” As environmental, social and governance issues become more pressing, especially for younger savers, it’s a savvy business move that will pressure its peers to follow suit.
But there’s a problem. With about two-thirds of the money it manages allocated to index-tracking funds, the issue of how to harness the resources in passive products — the bulk of which command fees that are too low to finance costly and time-consuming engagement with company boards — remains unaddressed.