Investment organization in Europe dismisses BlackRock due to commitments in climate-related ventures

The Netherlands' second-largest pension fund, the PFZW, which caters to health care workers, has announced it will no longer be using asset manager BlackRock to manage its investments. The decision, worth approximately $17 billion, mostly in stock funds, was made due to sustainability concerns.

The PFZW, with total investments of $300 billion, is one of the world's largest pension funds. The fund's decision to end its partnership with BlackRock, a New York-based asset manager that manages over $12.5 trillion in investments worldwide, comes amidst growing criticism over BlackRock's stance on climate change.

BlackRock, a top shareholder of U.S. fossil fuel giants such as Exxon Mobil, Chevron, and ConocoPhillips, has faced criticism for its continued investment in these companies. This criticism, in part, is due to pressure from Republicans and environmentalists who claim that BlackRock is backtracking on its commitment to address climate change.

However, it's worth noting that Larry Fink, BlackRock's CEO, has framed climate change as a major risk to investment portfolios. In a letter to CEOs in 2020, Fink stated that BlackRock believes that climate change poses a risk to financial stability and that the transition to a net zero economy could produce significant opportunities for companies that are prepared.

Despite this, environmentalists have continued to criticise BlackRock for its investments in fossil fuel projects and companies. The PFZW's decision to end its partnership with BlackRock, therefore, can be seen as a response to these concerns.

The PFZW's move follows a trend of increasing scrutiny on the role of asset managers in funding fossil fuel companies and their impact on climate change. As more pension funds and investors prioritise sustainability, it will be interesting to see how BlackRock and other asset managers respond to these changing expectations.

The PFZW confirmed to Reuters that it will stop using BlackRock to manage its investments, marking a significant shift in the relationship between the two parties. The exact reasons for the decision, beyond sustainability concerns, were not disclosed. However, it's clear that the issue of climate change and the role of asset managers in funding fossil fuel companies is a topic that will continue to be at the forefront of discussions in the financial industry.