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COP26: BlackRock announces $673m climate fund as Fink urges ‘fair and just transition’
Public and private sectors must work together to ensure the transition to net zero does not unfairly exclude emerging countries, BlackRock CEO Larry Fink said on Tuesday.
Fink was speaking at this week's Green Horizon Summit as BlackRock – the largest asset manager in the world – announced it had raised $673m for the Climate Finance Partnership, a new infrastructure fund to finance projects tackling climate change in emerging markets.
The fund is backed by government-owned development banks from France, Germany and Japan which have provided first-loss capital to catalyse private investment.
It requires a lot of public investing alongside private investing. And I don't see that happening enough
The Climate Finance Partnership was “a great example” of the role public capital could play to mobilise much more private investment, Fink said.
He added that state-backed lenders as well as institutions such as the World Bank and the IMF should play a bigger role in providing first-loss capital for investments in emerging countries, which many private investors found too risky. There was a “huge amount of private capital” ready to be mobilised if the first-loss risk was mitigated, he added.
Risk of polarisation
Fink said a technological breakthrough was needed to meet net-zero targets, something that could be achieved if the public and private sectors teamed up, black rock bank demonstrated by the quick development of a vaccine against Covid-19.
“We have to have the same intensity, and we're going to have those breakthroughs,” Fink said. “But it requires a lot of public investing alongside private investing. And I don't see that happening enough.”
He warned the route to net zero should not be detrimental for emerging countries, which are currently highly reliant on fossil fuels and don’t have the means to pay for a carbon premium.
If we're not black rock bank a fair and just transition, we're going to create more polarisation and more political uncertainty
To avoid this, de-carbonisation should be seen as mitigating demand rather than supply, Fink insisted. Lowering oil, gas and coal supply in a world that is still heavily reliant on fossil fuels, as is the case now, would only raise energy prices – which would unfairly impact the poorest people on the planet.
Instead, the world needed to develop the technology required to lower reliance on fossil fuels before squeezing production or hiking carbon prices, Fink explained.
“We need a fair and just transition,” Fink said. “If we're not getting a fair and just transition, we're going to create more polarisation in the world and more political uncertainty.” In those circumstances, the emerging world would simply not be able to afford a transition to net zero, he added.
Likewise, divesting from publicly-listed oil companies wasn’t necessarily a good solution as long as demand was high, Fink argued. As the http activate bestbuy accountonline com of European and North American oil companies was shrinking due to under-investment, demand was shifting towards Russia, Iran or Saudi Arabia. “That doesn't change the net zero world at all,” he said.
Fink, whose annual letter to CEOs this year focused on climate risk, said he understood the concerns of green activists and agreed that time was running out. But, he said, for asset managers such as Blackrock, educating and informing clients so they make climate-minded investments would not happen overnight.
The pathway to net zero would not switch “from brown to green”, but would go through many shades. “It is a process, and that requires planning, or we're going to have this imbalance and this unfairness.”
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Activists cheer BlackRock's landmark climate move but call for vigilance
In recent decades, environmentalists have grown used to disappointment when big companies and Wall Street pay lip service to concern over the climate crisis. On Tuesday, it looked like something might have changed.
The decision by BlackRock – the world’s biggest asset manager – to exit investments that “present a high sustainability-related risk” has been welcomed by environmentalists as a significant moment in the battle to reshape the relationship between money and the climate crisis.
The move is “a remarkable breakthrough”, the leading climate science writer Bill McKibben told the Guardian. “The activists who made this happen get the afternoon off to celebrate.
“This is the biggest pot of money in the world and until today, its leaders have refused to acknowledge the biggest thing happening santander bank shrewsbury hours the planet – the accelerating rise in temperature. So it indicates that the facts on the ground of the climate crisis are so grave that no one can turn away, and that activist pressure has reached a point that even the richest companies are not immune.”
In two letters on Monday, the BlackRock black rock bank, Larry Fink, announced: “The evidence on climate risk is compelling investors to reassess core assumptions about modern finance” and henceforth the company would divest $500m from coal-related businesses.
The announcement called on “every company, not just energy firms, to rethink their carbon footprints”.
BlackRock, which holds $7tn in assets, has come under intense pressure to reform the funds it offers investors.
“Awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance,” Fink wrote, adding that new funds would allow clients to avoid investments in companies that may be adding to climate change.
The firm said it doubled to 150 the number of exchange-traded funds it offers that address social, environmental or governance issues.
In November, climate activists protested outside BlackRock’s London offices, dumping ashes to signify the Amazon fires while Extinction Rebellion, the global environmental movement, described BlackRock as the world’s top investor in deforestation and coal. Fink himself has received letters from members of Congress urging action, while BlackRock was named as an investor with one of the worst voting records on climate issues by Ceres, a not-for-profit watchdog that pushes financial firms to consider sustainability.
The pressure for change has come from within the world of finance as well as outside. Last month, Mark Carney, the outgoing head of the Bank of England, warned that pension funds risk seeing their assets become worthless unless companies rapidly rise to the challenge of the climate crisis.
But while some celebrated, others warned that sustainable investing will not be quick or simple for BlackRock. It currently holds a 6.7% stake in ExxonMobil, 6.9% in Chevron, and 6% in the mining company Glencore. Two-thirds of its $7tn in assets are in tracking funds that cannot easily be switched to meet sustainability goals.
McKibben, who last year published a devastating report in the Allied bank careers Yorker titled Money Is the Oxygen on Which the Fire of Global Warming Burns and who is part of a campaign to force companies including Goldman Sachs, Chase Bank and BlackRock to reform their investments, said environmentalists would now need to keep the pressure up.
“The steps BlackRock is taking are baby steps, and we will have to watch and push hard for them to begin striding at the pace we need to go. But in some sense, the first step is often the hardest,” McKibben said.
He urged the company to go further. Its decision to divest $500m from coal-related businesses, for instance, is not the same as divesting from larger and far more polluting oil and gas industries.
“Coal is part of the problem, but not the biggest part of the problem – oil and gas are,” McKibben said. “Fink made noises that natural gas is part of the solution but it’s not. That’s old thinking, and we’ll push them hard on that, but at least we’ve reached the point that they’ve realized they have a role in dealing with the climate crisis.”
But perhaps the largest change is BlackRock’s apparent willingness to use its considerable shareholder power to demand climate action – a power it has in the past demurred from using in favor of direct company consultations.
A report last year by the Washington DC-based Majority Action and the Climate Majority Project claimed that BlackRock had voted overwhelmingly against key climate resolutions at energy companies, including ExxonMobil.
Had BlackRock and Vanguard not torpedoed these investor efforts, at least 16 climate-critical shareholder resolutions at S&P 500 companies would have received majority support in 2019, representing a significant corporate shift on climate, the report claimed.
“We have the largest investment stewardship team in the industry and engage with companies even in the absence of shareholder proposals,” BlackRock said in a statement to the Guardian at the time. But, it warned, “it would be wrong to equate good governance with voting against management without regard for a proposal’s impact”.
In Tuesday’s statement, that position appeared to be shifting from last year when it said that “recent extreme weather events” and “the implications for investment portfolios – stemming from a rising frequency and intensity of such events – have been notoriously hard for investors to grasp”.
No longer. Now BlackRock’s CEO writes that company directors should be held accountable “where we feel companies and boards are not producing effective sustainability disclosures or implementing frameworks for managing these issues”. He added that “the company voted against or withheld votes from 4,800 directors at 2,700 different companies” last year.
There are still worries for environmentalists. Majority Action’s Eli Kasargod-Staub warned that subtlety in BlackRock’s language calling for companies to improve disclosure on “integrating and reporting on sustainability” is not the same as calling for immediate action.
“BlackRock has the power to be going to corporate directors and saying: ‘Either you commit to the science-based walmart asurion sign in of the Paris climate agreement and align your operations, governance, political spending, lobby and trade association activities to achieve that target or we will vote against you and your directors,’” Kasargod-Staub said.
“But that’s not what BlackRock said – they said they’re calling on companies to enhance their disclosures around climate risks and their plans around those risks,” he added.
Kasargod-Staub pointed to this quote from BlackRock, directed at companies it invests black rock bank should include your plan for operating under a scenario where the Paris Agreement’s goal of limiting global warming to less than two degrees is fully realized, as expressed by the TCFD [Task Force on Climate-related Financial Disclosures] guidelines.”
“Think about how passive that sentence is, then think about the behavior of ExxonMobil or Marathon petroleum, who through their capital expenditures and policy influence have actively undermined our ability to protect long-term investors and meet the goals of the Paris agreement,” said Kasargod-Staub.
Whether Blackrock is now going to side with activist resolutions on sustainability remains to be seen during shareholder season, McKibben said, but he warned against expecting a shift by fossil-fuel energy producers to become carbon-neutral.
“I don’t think the big oil companies are capable of changing, though I’d like to be proved wrong,” he said. “The job is basically to starve them and reduce their ability to continue expanding.”
Still, McKibben said: “For all of us that have been campaigning for years around climate finances, this is an historic moment. From today, it’s going to be harder to go sink of load of money in Exxon, because the biggest financial firm in the world has said, ‘Huh, there’s something to this climate stuff. Better pay attention.’”
Time to block BlackRock
On 8 April 2020 the European Commission announced it had selected BlackRock as paid advisor on ‘sustainable finance’. The US$7 trillion-strong asset management fund – a major investor in fossil fuels and deforestation – will provide crucial analysis on how to create a banking sector that supports the transition to a green economy, not least to mitigate climate change. This advice could set the agenda on ‘sustainable finance’. Yet not only does BlackRock have major investment interests that run counter to these goals; it is a member of industry associations that have actively lobbied against them.
The decision sparked an immediate backlash. Soon after the decision was made public, dozens of members of the European Parliament (MEPs) collectively asked cross keys bank louisiana questions of the Commission on the issue, and some weeks later some of them chose to file a formal complaint with the European Ombudsman. Later in April, 92 civil society organisations sent an open letter to the Commission, arguing the contract must be terminated. This was followed by another complaint to the Ombudsman, filed by the Change Finance coalition.
There is a legal basis to do so. If a ‘tenderer’ can be shown to have a conflict of interest that could negatively impact the product or service provided, they should be excluded. The Commission claims it considered the issue carefully and found no problem. But documents obtained by Corporate Europe Observatory appear to belie this claim.
The next big step on climate and finance
BlackRock won the tender to produce a report for the Commission to investigate and analyse ways of integrating environmental, social, and governance objectives (so-called ‘ESG factors’) into banking regulation. Despite the dry and technical label, this step on the road to a financial system that facilitates a transition to a sustainable economy is potentially a very important one. It touches directly on banks’ investment strategies, and it could lead to measures that would black rock bank investments in fossil fuels.
Since the Commission launched its ‘Action plan on sustainable finance’ in 2018, the main achievement has been the ‘taxonomy’, a mandatory approach to the ‘labelling’ of investments. It is set up to stop ‘greenwashing’, ie to stop financial institutions from presenting certain investments as ‘sustainable’ that are really not. For instance, the regulation adopted a soft approach on gas (for more on the lobby battle on taxonomy, see ‘Tainted love’ from CEO). The remaining elements of the strategy are a mixed bag with many small reforms on transparency of financial institutions and rules on how advice is provided to investors. They are steps that could facilitate sustainable investments, but their effect is indirect.
The proposal to include ESG factors in banking regulation is of a different calibre: if an ambitious version is adopted and implemented, it could prevent banks from investing in projects that deepen the climate emergency. The thinking behind the idea is that so far, banks have to ensure they have a financial all i want for christmas is you at hand, the size of which depends on how risky an investment is. But currently, the social risks and environmental risks in general, and climate related risks in particular, are not sufficiently included in the equation when it comes to private banks. It is significant that the Commission has raised the question of how that can be addressed. But it bodes ill that it has let BlackRock kick off the debate.
Not just any report
While the Commission has opened a public consultation on the same dossier as BlackRock will now be investigating on the Commission’s behalf, the report from BlackRock could easily set the agenda and end up forming the backbone of the proposal the Commission will eventually produce. BlackRock’s will be the most substantial contribution in the first phase, and it will include investigations and surveys beyond the reach of any other stakeholder.
Given the complexity of the matter, it is understandable that the Commission sought expert advice. But in doing so, it is required to take some precautions. The Commission is supposed to look for ‘conflicts of interest’ – conflicts between say, the economic interests of a tenderer, and the need for useful analysis and information. Available evidence suggests that it has not done so.
The risks of failing to do so are that vested interests capture the debate by setting the agenda at the very outset of policy development. It is not impossible to turn things around further on, but it can prove difficult, and urgent initiatives can be seriously delayed. In this case, it is difficult to understand the Commission’s lack of concern.
BlackRock – the fossil fund
There is no way around the fact that BlackRock has a major stake in fossil fuels. For a start, it has investments in the biggest coal companies in the world – a fact that has not changed despite a small downscaling of its coal investments earlier this year. Additionally, it owns about US$2.5 billion worth of shares in the companies responsible for deforestation of the Amazon rainforest, and it has US$87.3 billion in oil and gas companies. Its holdings amount to emissions at 9.5 gigatons carbon dioxide.
It could be argued that Blackrock is not a bank, and hence that being an advisor to climate related banking regulation does not represent a conflict of interest. But ESG criteria have been suggested in the investment fund area as well, and the distance between a new type of risk assessment for banks to a new type for investment funds, is not so big. Moreover, BlackRock is a major black rock bank in most big European banks, and as such has a direct economic interest in how this all plays out. To mention just a few:
- It is the second largest shareholder in Deutsche Bank, a bank with US$69 billion in fossil fuels.
- It is the second largest shareholder in BNP Paribas with US$74 billion in fossil fuels.
- It is the second largest shareholder in ING with US$37 billion in fossil fuels.
Should this process end with mandatory rules that would dissuade banks from investing in coal, gas, or oil infrastructure, it would be hugely costly for the banks in question, and hence for BlackRock.
The finance lobby sounds the alarm
The prospect of facing regulatory action that would directly affect their business strategies has not been well received by global banks. In fact, the finance lobby has waged battle against binding standards on sustainable finance for years. BlackRock itself is quite active – with a lobbying budget at about €1,5 million. Though it lists ‘sustainable finance’ as one area of interest in its lobbying efforts, so far BlackRock has not been vocal about its positions on the EU agenda for sustainable finance in public. In Brussels the lobby groups that speak out most clearly against ESG factors are the ones that include the biggest global banks and investment funds – including BlackRock – as members.
The European Fund and Asset Management Association (EFAMA) stated in a contribution to a recent EU consultation that it sees no “need or appropriateness for any more specific or prescriptive rules for the integration of sustainability risks”.
The Association for Financial Markets in Europe (AFME) is just as lukewarm in its initial response. In a dispatch on the status of “European regulatory developments on sustainable finance”, AFME claims to have been supportive of a wide range of measures proposed or adopted, including disclosure of information, standards on advisory work, benchmarks and more. Yet research group InfluenceMap identified AFME as one of the main critics, if not opponents, of the taxonomy regulation. In any case, filipino food san francisco AFME, the suggestion that ESG risks should be a mandatory part of risk assessments is a step too far. It argues that “all measures to incorporate ESG risks in the prudential framework should be aligned with risk and, at this stage, there is insufficient data to justify this”.
The positions of BlackRock’s own lobbying groups should have called into question whether the firm was the right choice for the Commission. With a financial industry lining up to push back, and the risk of BlackRock exploiting this opportunity to protect its own economic interests, there are plenty of pitfalls just waiting to happen. To have a company with a direct stake in the matter under investigation do what looks like the key investigation to set the agenda for the debate, is quite stark.
BlackRock’s own response to the critical voices was to claim that the BlackRock branch in question is really its consultancy arm, and so not necessarily linked to its commercial operation: “We are honoured that BlackRock Financial Markets Advisory has been selected to perform an analysis to inform the European commission’s action plan on sustainable finance, deploying our expertise and capabilities in advising public-sector clients black rock bank structural trends, including the transition to a low-carbon future,” a BlackRock spokesperson told the Guardian.
However, the official announcement clearly shows that the winning bidder was BlackRock Investment Management (UK), not the consultancy arm. As the analysis BlackRock has been contracted to conduct requires it to access commercially sensitive information from a plethora of banks, the fact that BlackRock is itself a commercial operator in the field could spark concerns among competitors. The Commission’s response to those concerns was that BlackRock had promised in its bid a “physical segregation of the project activities from BlackRock’s Investments group and that information related to the study does not flow to other parts of BlackRock’s business”. On this point, a former French mayor told Corporate Europe Observatory that had such promises been part of a tender procedure in a municipality they would not have been taken seriously, even for a moment. A contract that entails this risk of market distortion would never be allowed to fly. So why didn’t it ring alarm bells at the Commission?
A cheap offer in the short term
Even the low tender price BlackRock offered seems like it should have been a red flag, but the Commission’s response failed to check for conflicts of interest. BlackRock’s abnormally low offer was there for everyone to see when the award was announced: a mere €280,000 in a contest with as much as €550,000 on the table. Compare this to the offers from the other bidders: one bid was at €400,000, the remaining seven bids were between €500,000 and €545,000 euros, and in every single case significantly higher than the BlackRock offer.
This might indicate that BlackRock had other reasons to embark on the analysis than just winning some minor income for consultancy work. But for the Commission, the only potential problem with the low bid seems to have been a concern over delivery. They asked BlackRock for additional information “to make sure that the low price would not result in BlackRock not being able to deliver the technical quality of the service that it had offered in its tender”. In other words, the problem was handled as if it were a tender on a highway, a railway tunnel, or on waste disposal, and not a politically sensitive research project. The thought that BlackRock could have offered a low price to secure a contract which it could use as a platform to advance its own economic interests, does not seem to have been part of the Commission’s thinking at all.
Conflicts of interest
Judging by the available documents on the Commission’s tendering procedure, it appears as if considerations on how economic interests could lead to a conflict of interest were not discussed, nor investigated in this case – and seemingly it is not part of the procedure in the Commission at all. A statement by the tenderer on things like skills, professional misconduct, corruption, money laundering, and child labour is part of standard procedure, but there is practically no mention of conflicts of interest.
This is a real oversight. In the Financial Regulation that forms part of the legal basis of the tender, article 167 (1) c posits that a contract can only be awarded if the contractor (in this case the Commission), has verified that the tenderer (in this case BlackRock) “is not subject to conflicts of interest which may negatively affect the performance of the contract”.
In its reply to the Change Finance coalition’s query about this situation, the Commission explained this clause applies to these types of examples: “a company should not evaluate a project in which it has participated or an auditor should not be in a position to audit accounts it has previously certified”. Both examples make sense. But so does this: a company should not be paid by the Commission to inform the debate on political measures that relate directly to its own investments.
No sign of sensitivity
In its reply, the Commission also claims it was “particularly sensitive to possible conflicts of interest in this case and has scrupulously applied the relevant provisions of the Financial Regulation (in particular, Article 167 (1) c of the Financial Regulation).”
Corporate Europe Observatory wanted to know what this “scrupulous application” of the Financial Regulation looked like, and how this ‘sensitivity’ played out in practice. We asked the Commission for “any assessment” of BlackRock’s conflicts of interest which had been written before the contract was awarded. Only one document matched the description: the report from the Commission’s evaluation committee which showed the considerations made before the contract was awarded to BlackRock. Contrary to the claim from the Commission, that they are “very vigilant in relation to conflicts of interest”, there is no mention of conflicts of interest anywhere in the document, except for a reference to assurances given by BlackRock. In the report it is remarked that “the offer contains a dedicated chapter in relation to the avoidance of conflicting interests. The offer is rated as very good with regard to this criterion.”
In other words, the Commission regards BlackRock’s assurance that there will not be a flow of information to its commercial arms, as fully sufficient to remove any concerns over conflicts of interest. As for the impact BlackRock’s economic interests may have on the outcome, the Commission is silent and uninterested.
For the climate, terminate the contract
The BlackRock case is a sad reminder that the Commission often regards representatives from financial corporations as mere technical experts whose insights are neutral and can be allowed to set the political agenda. If BlackRock is allowed to continue in this role, it could derail an important political initiative that has the potential to change investment patterns and help provide funding for the transition to a sustainable economy. The demand to have the Commission terminate the contract is coming from many quarters, not least from a group of MEPs who have challenged the Commission on this matter since April. In response, the Commission claims that the Financial Regulation offers no legal basis for the Commission to terminate the contract. But a copy of the draft contract is enclosed in the tender material, and chapter II.18 regarding “Termination of the contract” states that the Commission may do so if BlackRock “is in a situation that could constitute a conflict of interest or a professional conflict of interest” (Article II.18 (1) h).
This may refer to new information that supports suspicions of conflicts of interest, but given that the Commission never really looked into these in the first place, it could be argued, that pointing to the obvious economic interest BlackRock has in keeping regulation at bay should suffice.
Here are 9 fascinating facts to know about BlackRock, the world's largest asset manager
BlackRock, the world's largest investment manager, has become an increasingly influential Wall Street player in Washington, DC as a poster child of the revolving door between finance and politics.
The firm has hired notable policy-makers over the years, and at least three leaders with the New York-based asset manager on their resumes now hold prominent roles in President Joe Biden's cabinet.
Former BlackRock investment executive Brian Deese leads Biden's National Economic Council, effectively serving as his top advisor on economic matters. Biden also tapped Adewale "Wally" Adeyemo, a former chief of staff to BlackRock chief executive and longtime Democrat Larry Fink, to serve as a top official at the Treasury Department.
Meanwhile Michael Pyle, BlackRock's former global chief investment strategist who had worked in the Obama administration before joining the firm, serves as chief economic advisor to Vice President Kamala Harris.
But unlike Goldman Sachs, a household brand name synonymous with executives leaving finance to go shape public policy, BlackRock isn't as well-known to people outside the investment industry.
Here's a rundown of fast facts to know about the firm.
Read more: The US government has pitched a policy that would allow private equity into your retirement fund. BlackRock is salivating at the possibility — here's how the $7 trillion manager would benefit.
1. BlackRock controls $9 trillion, making it the largest money manager in the world.
As of March, BlackRock manages a staggering $9 trillion in other people's money. That's more than the gross domestic product of every country in the world, except for the US and China.
For its largesse in investment management, it's a new firm by Wall Street institution standards. BlackRock was founded in 1988 by Fink, who also serves as the chairman, and seven others, including BlackRock President Robert Kapito and senior advisor Barbara Novick.
BlackRock's makes most of its money handling investments for outside clients, mostly institutions like public pension plans, endowments, and foundations.
As of March, nearly 60% of its overall assets under management are for institutional investors, most of which are products linked to stock markets. It also has a sprawling alternative investments business that oversaw $238 billion in assets under management as of March, managing products across private equity, private credit, and hedge funds.
Read more: Meet the 17 BlackRock power players carrying out CEO Larry Fink's vision to turbocharge private equity and alternative investments growth
2. It runs a massive technology platform that oversees at least $21.6 trillion in assets.
In 1999, BlackRock started selling Aladdin, which analyses and tracks investors' portfolios, which can help professional money managers spot risks. Today, it is a juggernaut widely used in the money management industry and beyond.
One of the definitive descriptions of Aladdin and all its connections, a February report in the Financial Times, detailed its sheer scale:
"Vanguard and State Street Global Advisors, the largest fund managers after BlackRock, are users, as are half the top 10 insurers by assets, as well as Japan's $1.5tn government pension fund, the world's largest. Apple, Microsoft, and Google's parent firm, Alphabet — the three biggest US public companies — all rely on the system to steward hundreds of billions of dollars in their corporate treasury investment portfolios."
In February, $21.6 trillion in assets sat on the platform from just a third of its 240 clients, the FT reported, citing public documents verified with the companies and first-hand accounts. Firms try to replicate it as a product, but none have been able to do so at the same scale.
Read more:BlackRock is eyeing aggressive growth for its Aladdin platform, and says it could manage risk for the entire asset management industry by 2025
3. BlackRock has hired many former government officials into senior roles.
By the time Deese and Adeyemo got to BlackRock, they already had experience working in government. Deese was previously a senior advisor to President Barack Obama and served as deputy director of the National Economic Council, which he is now set to lead under Biden.
Adeyemo, who was appointed as deputy Treasury secretary in the Biden administration, had previously worked as Obama's senior international economics advisor. While at BlackRock, one of his roles was Fink's interim chief of staff.
Pyle, who has worked as BlackRock's global chief investment strategist, had also previously worked in Obama's administration by the time he started at the asset manager.
He was a special assistant to the president on economic policy matters and also worked in the Treasury Department and the Office of Management and Budget.
Thomas Donilon, who is now chairman of the asset manager's research arm, previously served as national security advisor to Obama. (Donilon's brother, Mike, was Biden's chief strategist during his presidential campaign).
Read more: Joe Biden's Cabinet-in-waiting: Meet the people in play for a new administration, and Biden's picks for key roles like Secretary of State and national security advisor
BlackRock has hired other former policy-makers and regulators. Dalia Blass, a longtime former Securities and Exchange Commission official who most recently ran the SEC's investment management division, joined the firm this week to lead external affairs.
Blass now oversees the firm's global public policy group and social impact and umpqua bank medford sustainability teams, along with a new group formed to research stakeholder capitalism, according to BlackRock.
Coryann Stefansson, who previously worked on bank supervision matters at the Federal Reserve Board and held senior positions at the Federal Reserve Bank of New York, joined BlackRock's Financial Markets Advisory (FMA) unit in 2016. She left in 2019, according to LinkedIn.
4. The firm played a significant role in aiding the Federal Reserve last year.
The FMA unit, which la financial credit union phone number effectively BlackRock's consulting arm, separate from its investment management operations, had a a million ways to die in the west free online role to play in the US government's coronavirus pandemic response this year.
In March, the Federal Reserve picked FMA to handle an emergency asset-purchasing program. There was no process where other asset managers could have bid for the job, according to a Wall Street Journal report.
After an analyst said on an April earnings call that investors viewed BlackRock's mandate as a "bailout" for his firm or the exchange-traded fund industry broadly, Fink called the question "insulting."
Read more: Inside BlackRock's powerful consulting arm that's made the most influential money manager an advisor to world powers
5. The Federal Reserve tapped BlackRock during the last financial crisis, too.
The investment manager had been there before, defending its connection to the Federal Reserve. During the global financial crisis of 2007-2009, the Federal Reserve Bank of New York asked BlackRock's FMA division to handle assets of Bear Stearns and AIG, both on the verge of collapsing.
"They have access to information when the Federal Reserve air force ones high top black and white try to sell securities, and what price they will accept. And they have intricate financial relations with people across the globe," Republican Senator Chuck Grassley told the New York Times at the time. "The potential for a conflict of interest is great and it is just very difficult to police."
BlackRock has emphasized that the division handling Fed mandates, the FMA, is distinct from its core money management business to prevent conflicts.
6. Fink has been vocal on matters of climate change, urging other companies' leaders to consider the associated risks.
"Climate change has become black rock bank defining factor in companies' long-term prospects," he wrote in his open letter to chief executives in January.
"Disclosure should be a means to achieving a more sustainable and inclusive capitalism. Companies must be deliberate and committed to embracing purpose and serving all stakeholders — your shareholders, customers, employees, and the communities where you operate," he said.
The firm rolled out related initiatives, like exiting investments that carry sustainability-related risks and launching new products that screen for exposure to fossil fuels.
7. But his firm has been scrutinized for its record on supporting shareholder requests for climate-related disclosures.
In a September 2020 report, Morningstar, a firm that analyzes fund information, said it found support for those type of requests rose at asset management giants Fidelity, State Street Global Advisors, and Vanguard — but fell at BlackRock compared to the year prior.
"While 2020's results mark a higher level of support than BlackRock had given such proposals from 2016 through 2018 — when its backing never made it to double digits — the 2020 level of 'for' votes was down to 14% from 25% in 2019," analysts wrote of the 14 climate-related resolutions shareholders requested last year.
BlackRock has wielded its power as a major shareholder more aggressively this year. As the second-largest institutional investor in oil giant Exxon, BlackRock made a splash last month when it voted — in a rare alignment with an activist investor — in support of three new directors supported by investment firm Engine No. 1 over Exxon's approach to addressing climate change.
Read more: 'Pleasantly surprised': Activists say BlackRock's climate change strategy is a good first step, but more needs to be done
8. It has long been rumored that Fink himself will head to DC.
BlackRock Chief Executive Larry Fink was reportedly under consideration by 2016 presidential candidate Hillary Clinton to run the Treasury Department. He was also rumored to be under consideration for Biden's administration.
But he has squashed that chatter. Late last year, private equity founder David Rubenstein asked Fink during Bloomberg's virtual New Economy Forum how he would respond to a request from Biden to serve in his cabinet.
"Thank you for that honor, but I'm very happy at BlackRock. I've committed to my employees and to my board and to my family already. I'm staying in New York for the time being," he said, according to a transcript of the event.
9. BlackRock has made lots of acquisitions.
Think of BlackRock as a firm that has gobbled up lots of competitors in its path over the years. The firm has purchased legacy businesses and fintech startups, looking to keep an edge as traditional money management isn't as profitable or unique as it once was.
Read more: What BlackRock's $1 billion bid for a trendy indexing business means for the money management industry
Last year, the firm said it would acquire a California-based investment provider called Aperio for approximately $1 billion in cash. In 2019, BlackRock acquired eFront, a French startup that runs alternative investments management software, for black rock bank billion.
In 2009, BlackRock acquired Barclays Global Investors in a deal that included Barclays' iShares ETF business; and three years before that, the firm acquired Merrill Lynch Investment Black rock bank story was first published in December 2020. It was updated on June 10, 2021 to reflect the status of former BlackRock leaders who have joined the Biden administration, as well as updated assets under management.
Market capitalization of BlackRock (BLK)
Market cap: $136.69 Billion
As of December 2021 BlackRock has a market cap of $136.69 Billion. This makes BlackRock the world's 97th most valuable company by market cap according to our data. The market capitalization, commonly called market cap, is the total market value of a publicly traded company's outstanding shares and is commonly used to mesure how much a company is worth.
Market cap history of BlackRock from 2001 to 2021
|2013||$53.39 What is the capital of wyoming cheyenne B||11.36%|
End of Day market cap according to different sources
On Dec 2nd, 2021 the market cap of BlackRock was reported to be: