Today, BlackRock CEO Larry Fink said during a conference on infrastructure investments that last week’s ruling requiring Shell to deepen its planned greenhouse gas emission cuts is not the way to solve the global decarbonization issues. Moreover, he stressed that the Dutch court decision against Shell was an example of a general attitude that failed to address the overall problem.
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Accordingly, the head of the world’s largest money manager said that the ruling “doesn’t change the global footprint; that’s not a solution,” Fink said during a conference on infrastructure investing.
Blackrock CEO Larry Fink on recent environmental rulings to public oil companies
Indeed, the CEO stresses how these decisions aren’t really addressing the climate change challenges; “We’re doing a lot of greenwashing because we’re not changing the carbon footprint of the world. We may change the carbon footprint of a company.”
Similarly, Fink said governments were not doing enough to ensure a widespread push toward a carbon-neutral future. Nor are they creating an incentive for companies to offload their hydrocarbon businesses. In contrast, through ruling decisions, they are causing a “huge capital markets arbitrage.”
Thus, “what I worry about is that we’re going to put all pressure on public (listed) companies and very little pressure on the private side,” he said.
Worth noting, the ruling is expected to force Shell to shed assets to comply. Moreover, the decision could trigger legal action against other energy companies. As a result, Shell said it was disappointed with the ruling and planned to appeal.
“The net-zero world doesn’t change, but the company looks better”
“If we are really sincere about the world having a net-zero carbon status in 2050, we cannot move these parts of the economy out of public entities into private hands,” says the CEO. Therefore, “the net-zero world doesn’t change, but the company looks better.”
Accordingly, Fink called on investors to work with energy companies to support their green transition. Moreover, BlackRock will engage with those in which it holds stakes.
Indeed, BlackRock is the top investor in BP and last week backed a shareholder resolution from activist group ‘Follow This’ asking the energy group to set deeper climate targets. Similarly, the company has voiced support for energy transition strategies at Total and Shell at recent annual general meetings.