BlackRock’s Blunt Truths About Climate: Climate Responsive Investing Trumps Climate Denial But Can it Address Climate “Apartheid”?

Credit: Atharva Tulsi on Unsplash

In the waning days of 2019, millions spurred by the laser-focused climate activism of young Greta Thunberg, who campaigned for climate action across the world, were left crushed that the 25th UN annual climate negotiations conference ended in utter disarray.Despite extending the two-week Madrid meeting for an additional two days, and after 25 such consecutive annual climate conferences convened in diverse cities, countries failed to deliver essential outcomes such as setting a rulebook for the Paris Agreement (PA), and designing a global carbon market. On June 1, 2017, United States (US) — the world’s second largest aggregate GHG emitter — announced its decision to unilaterally withdraw from the PA. Now, more than four years after its adoption, the future of the PA appears dismally complicated at best.

Droughts, super-typhoons, forest fires have devastated numerous communities and regions, valuable biodiversity resources have been lost forever and glaciers have melted whilst intergovernmental textual agreement on ambitious climate action still remains quixotic. But, it is the massively inequitable scope and scale of climatic adversities on the poorest and most vulnerable that has consistently been acknowledged and yet left unaddressed that is the real tragedy especially for developing countries. Calling attention to the massive scale of loss and dislocation the UN Special Rapporteur on extreme poverty and human rights, Philip Alston pointed that “even if current targets are met”, the most severe climatic impacts would be experienced by poor countries and communities: “Perversely, while people in poverty are responsible for just a fraction of global emissions, they will bear the brunt of climate change, and have the least capacity to protect themselvesWe risk a ‘climate apartheid’ scenario where the wealthy pay to escape overheating, hunger and conflict while the rest of the world is left to suffer.”(UN News, 2019)[i]

So what exactly will the wealthy do in response to a “climate apartheid” scenario? Well in 2019, according to an article in Eco-Watch, a highly selective, by-invitation only, celebrity-focused, 3 day Google camp on climate change which cost upwards of $20 million, meant that Palermo airport prepared “for the expected arrival of 114 private jets”.[ii] But in January 2020, it appears that climate responsive investing (for those can access asset fund managers) is conclusively here- jump-started by two letters by Larry Fink, the head of BlackRock to CEOs[iii] and clients[iv] respectively. The fact that the world’s largest asset fund manager was explicit that BlackRock is now putting “sustainability at the center of our investment approach” is the analog of a paradigm shift for global investors. A Jan 15, 2020 article by Dawn Lim in the Wall Street Journal describes just how big of a global imprint BlackRock Inc. has as its “assets surpassed $7 trillion for the first time as the investment giant reported record-setting flows in 2019”. [v]

What sets Fink’s letter to CEOs apart is not just the global significance of his company but his argument that BlackRock is an asset manager that “invests on behalf of others”, and that he is writing “as an advisor and fiduciary” to clients because as he puts it “the money we manage is not our own. It belongs to people in dozens of countries trying to finance long-term goals like retirement. And we have a deep responsibility to these institutions and individuals – who are shareholders in your company and thousands of others – to promote long-term value”. His explicit recognition that “climate change has become a defining factor in companies’ long-term prospects” also touches on another key point which is that climate activism by ordinary people apparently resonated in the shift towards sustainable, climate responsive investment decision-making. As Fink point outs, “Last September, when millions of people took to the streets to demand action on climate change, many of them emphasized the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.[vi]

Credit: Hamza Bounaim on Unsplash


Fink‘s decision makes it harder for climate deniers who have tried to obfuscate the preponderance of evidence regarding climate risk. BlackRock’s conclusion that “climate risk is investment risk” fundamentally alters investment assumptions, but it also has huge relevance for governmental decision making related to the policy intersection between highly polluting solid-fuel energy reliance and climate vulnerabilities. BlackRock signals that it will exit thermal coal which is “becoming less and less economically viable, and highly exposed to regulation because of its environmental impactsAs a result, we are in the process of removing from our discretionary active investment portfolios the public securities (both debt and equity) of companies that generate more than 25% of their revenues from thermal coal production, which we aim to accomplish by the middle of 2020”.[vii] This deadline of mid 2020 is a tell-tale signifier that private-sector investment decisions are moving exponentially faster than governmental decision-making regarding the risks of thermal power reliance.

It is Fink’s blunt truth reference that a sustainable energy transition “will still take decades” that is crucially relevant for cities in India trying to simultaneously cope with high levels of energy-related air pollution and climatic adversities anticipated to be borne inequitably by poorer and vulnerable communities. A 2015 Special Report by International Energy Agency (IEA) identified India having the “largest population in the world relying on the traditional use of solid biomass for cooking: an estimated 840 million people – more than the populations of the United States and the European Union combined”.[viii] The use of solid biomass for cooking is directly related to the release of harmful indoor air pollutants- short-lived climate pollutants- that are a major cause of premature death and ill-health particularly for children, women and the elderly, and also impact on regional food security and biodiversity loss. A more recent 2020 Country Report by the IEA indicates that India has heavily subsidized the provision of Liqufied Petroleum Gas (LPG-also known as cooking gas) in order to reduce exposure to indoor air pollution and has set 2022 as the target to achieve 100 smart cities, LPG connections to all housing, universal electricity access and 175 GW of renewable electricity capacity.[ix]

New partnerships focused on pollution reduction are urgently needed because there is no escaping the smothering haze across major Indian cities today. A Bloomberg article entitled “World’s Dirtiest Air is now in India” referenced a joint data study by Greenpeace and IQAirVisual that found that seven of top 10 cities with worst air quality in 2018 are in India: “India, the world’s fastest-growing major economy, makes up 22 of the top 30 most polluted cities, with five in China, two in Pakistan and one in Bangladesh. India racks up health-care costs and productivity losses from pollution of as much as 8.5 percent of gross domestic product, according to the World Bank”.[x]

The question of how countries like India can work with the private sector to pursue a clean energy transition that Fink argues “cannot leave behind parts of society, or entire countries in developing markets, as we pursue the path to a low-carbon world” remains daunting. Fink makes a forceful call for governments to lead the way so that companies/investors can follow, and points out that BlackRock was “a founding member of the Task Force on Climate-related Financial Disclosures (TCFD)” as well as a signatory to the UN’s Principles for Responsible Investment (PRI). But, delivering on the promise of linked action for millions who are currently consigned to suffer at the toxic intersection of energy pollution and climatic adversities requires the elimination of intergovernmental silos that segregate action on two separate UN Sustainable Development Goals (SDGs)- sustainable energy for all (SDG 7) and climate (SDG 13).

It is a fallacy to somehow expect effectively linked partnership actions on a low to zero carbon energy transition focused on the overarching priority of poverty reduction via two distinct SDGs that are being implemented within separate policy silos. The good news is that integrated clean energy and climate transition partnerships do not need to wait for the moribund textual parsing and political posturing of intergovernmental climate negotiations. Instead the loci for linked action on access to clean energy and climate resiliency for poor and vulnerable communities can and does reside at the local/city government level.

Cities are undeniably on the frontline for clean energy and climate justice, as well as climate resiliency solutions. According to UN’s, “The World’s Cities in 2018”, cities consume more than two-thirds of the world’s energy, and account for more than 70 per cent of global carbon dioxide emissions. The number of cities with more than 10 million inhabitants -“megacities”- is projected to rise from 33 in 2018 to 43 in 2030, with Delhi overtaking Tokyo as the world’s largest megacity and Kinshasa becoming the tenth most populous city by 2030.

Delhi will overtake Toyko as the world’s largest city by 2030
Between 2018 and 2030, the population of Delhi, India is projected to increase by more than 10 million inhabitants, whereas that of Tokyo, Japan is projected to decline by almost 900,000. The two cities are thus expected to change places on the list of the world’s cities ranked by size. Projection indicate that the worlds tenth largest city in 2018—Osaka, Japan—will no longer be aomong the ten largest in 2030. Kinshasa, Democratic Republic of the Congo will grow to rank as the tenth most populous city in the world in 2030.

The UN Secretary General highlights that “cities are where the climate battle will be largely won or lost” (UN: 2019) but winning this battle requires linked action rather than silos on climate and clean energy. Fink and other high net worth individuals who argue that climate responsive investment should not leave behind “large parts of society or entire countries in developing markets” need to drastically scale up partnerships with the C-40 Initiative and others to deliver an integrated nexus on clean energy, climate justice and community resilience within the bustling cities/megacities of Asia, Latin America and Africa.



[i] UN News (2019) “World faces ‘climate apartheid”, 120 more million in poverty: UN Expert” June 25, 2019.

[ii] Davidson, Jordan (2019) “Google camp on climate crisis attended by Rich and Famous in Private Jets and Mega Yachts”. Ecowatch. Aug 2, 2019. (Accessed on August 20, 2019)

[iii] Blackrock (2020) “Larry Fink’s Letter to CEOs”

[iv] Blackrock (2020) “ Letter to Clients”

[v] Lim, Dawn (2020) “BlackRock’s Assets Blow Past $7 Trillion in Milestone for Investment Giant”. The Wall Street Journal. Jan 15, 2020.

[vi] Blackrock (Fink’s letter) op.cit.

[vii] Ibid.

[viii] IEA (2015) Special Report: India. Paris: IEA. p.29.

[ix] IEA (2020) India 2020: Energy Policy Review . Paris: IEA. p.33.

[x] Jamrisko, Michelle (2019) “The World’s Dirtiest Air is in India”. Bloomberg, March 4, 2019. \