Suspension of operations by NZAM due to BlackRock's departure
BlackRock Exits Net-Zero Asset Managers Amidst Widespread Criticism
The Net-Zero Asset Managers (NZAM) alliance, a network of financial institutions committed to achieving net-zero greenhouse gas emissions, has experienced a significant shakeup with the departure of BlackRock, the world's largest asset manager. This move could have far-reaching implications for the alliance, given BlackRock's status as a key player in the global financial sector.
The departure of BlackRock from NZAM was announced separately from the recent restructuring of the Glasgow Financial Alliance for Net Zero (GFANZ), an umbrella group for various net-zero alliances. The restructuring aims to tighten accountability and boost the climate ambition of its members, ensuring more concrete, immediate sectoral measures against fossil fuels.
NZAM, which previously boasted over 325 member institutions managing a combined $57.5 trillion in assets, has been under scrutiny for its net-zero commitments. Critics argue that many member institutions continue to finance fossil fuels and fail to make immediate and concrete reductions in emissions, relying instead on long-term targets and offset schemes.
In response to these concerns, NZAM has launched a review of the initiative to ensure it remains fit for purpose in the new global context. References to membership requirements have been removed from the alliance's website, suggesting a shift in approach.
The exact reasons for BlackRock's decision to leave NZAM are not specified. However, it's worth noting that global stewardship alliances, including NZAM, have faced legal threats from Republican politicians in the US. This political pressure could potentially have influenced BlackRock's decision.
Meanwhile, GFANZ has announced a change in participation criteria, allowing financial organizations to participate without being formal members. This move could attract a broader range of institutions and increase the alliance's influence in the financial sector.
In summary, the exit of BlackRock from NZAM and the restructuring of GFANZ reflect a broader skepticism in the financial sector about the effectiveness of net-zero frameworks in delivering real-world emissions reductions. Both events underscore the need for greater accountability and immediate, decisive climate action from financial institutions.
The departure of BlackRock, a key player in global finance, from the Net-Zero Asset Managers (NZAM) could mark a shift in business practices, given widespread criticism over the alliance's general-news worthiness and members' reliance on long-term targets instead of immediate emissions reductions. The politics surrounding the issue may have also played a role in BlackRock's decision, as Republican politicians in the US have threatened legal action against stewardship alliances.
