The good news is that the worldâs largest fund manager, BlackRock, just closed $1 billion of a record $2.5 billion fund dedicated to solar, wind, and energy storage projects. The bad news is that the $2.5 billion fund is a tiny fraction of BlackRockâs $6.96 trillion balance sheet and small change compared to BlackRockâs $17.5 billion investment in coal.
December 6, 2019
The good news is that the worldâs largest fund manager, BlackRock, just closed $1 billion of a record $2.5 billion fund dedicated to solar, wind, and energy storage projects.
BlackRockâs Global Renewable PowerÂ III fund has commitments from over 35 institutionalÂ investors in North America, Europe and Asia and âreflects strong investor demand forÂ renewable power assets,â according to a release.
BlackRock already manages one of the worldâs largest renewable power portfoliosÂ with $5.5 billion in assets under management and investments in more thanÂ 250 wind and solar projects since 2011.
DavidÂ Giordano, Global Head of BlackRock Renewable Power, said, âAs globalÂ power generation shifts from two-thirds fossil fuels to two-thirdsÂ renewables over the next few decades, renewables are increasinglyÂ becoming a standalone allocation for investorsÂ and one of the mostÂ active sectors in infrastructure.â
When quizzed byÂ PV-Tech, a spokesperson for BlackRock said that it would target commercial and industrial solar projects, a good fit with its recent investments in CleanCapital and Distributed Solar Development.
The bad news
The bad news is that the $2.5 billion fund is a tiny fraction of BlackRockâs $6.96 trillion balance sheet and small change compared to BlackRockâs $17.5 billion (and growing) investment in coal.
According to The Global Coal Exit List, âBlackRock is not only theÂ largest investor in companies developing new coal plants, it is also the largest shareholder inÂ oil, gas, and thermal coal reserves.â
Financial Times quotes Christopher Hohn, founder of the TCI hedge fund, as saying, âMajorÂ asset managers such as BlackRock have been shown to be full of greenwash.â FT adds that BlackRock âcontinues to pour money into sectors such as fossil fuels through its mainstream investment products â dominated by passive funds that track indices.â
Impactalpha expands on that: âAs a manager of mostly âpassiveâ portfolios pegged to indexes, BlackRock has been loath to divest from fossil fuels and other environmentally destructive industries and only rarely bucks management on shareholder resolutions.â
But other large funds are changing their ways: Japanâs $1.6 trillion Government Pension Investment Fund is potentially shifting up to $50 billion of its fund to add more careful review of the ânegative externalitiesâ created by firms in its portfolio.
Gillian Tett of FT writes that BlackRock has begun âimplementing a comprehensive internal analysis of all its operations in relation to climate change, covering both active and passive funds.â She expects âmore pressure on corporate management for climate-risk disclosure and other environmental, social and governance issues.â