The world’s biggest asset manager is “a global leader in financing forest destruction,” reports Amazon Watch.
Cross-posted from Zero Hedge
According to a new report from the Friends of the Earth U.S.; Amazon Watch; and Profundo, Larry Fink’s BlackRock Inc is one of the top investors in companies “responsible for tropical forest destruction in the Amazon and around the world.”
The report called BlackRock’s Big Deforestation Problem, published on Amazon Watch’s website, claims BlackRock is the top three shareholders in 25 of the world’s biggest publicly traded deforestation-risk companies; these companies are known for producing soya, beef, palm oil, pulp and paper, rubber and timber, but also have a long track record in burning down forests to clear land for agriculture purposes. The New York-based investment bank is also a top ten shareholder in another 50 of the world’s top deforestation-risk companies, the report added.
“The data is clear: from the Amazon to the great forests of Africa and Southeast Asia, BlackRock is a global leader in financing forest destruction,” said Jeff Conant, senior international forest program manager with Friends of the Earth U.S., the report’s lead author.
“As long as this financial behemoth continues to unconditionally back the world’s most destructive agribusiness companies, the forests of the world, and consequently the climate and the rights of forest-dwelling people, will continue to go up in flames. BlackRock is literally reaping profits as the world’s jungles burn.”
BlackRock’s investment in deforestation-risk companies has been increasing in the last half-decade. In 4Q14, BlackRock owned roughly $1 billion in deforestation-risk investments. By 4Q18, the value of these investments jumped to $1.6 billion.
The report said the investment firm’s deforestation-linked commodity holdings are comprised mainly of index funds. In 2014, 80% of BlackRock’s deforestation-linked commodity holdings were through index funds; by 2018, it had jumped to 94%.
“BlackRock claims that its hands are tied by index funds. It is wrong. BlackRock can follow the lead of other global asset managers and make change for the good of the rainforest, the climate, and of its customers by shifting investments out of companies wrecking the planet, and applying maximum pressure to change company behavior,” said Moira Birss, Finance Campaign Director of Amazon Watch.
“The fires currently raging in the Amazon clearly demonstrate the risk that agribusiness expansion poses for the Amazon rainforest, indigenous peoples, and the global climate. By expanding investments in the very industries complicit in that destruction, BlackRock is emboldening right-wing President Jair Bolsonaro to continue his quest to raze the Amazon for profit-making,” Birss added.
The Norwegian Government Pension Fund has addressed the crisis in the Amazon by preventing its fund from purchasing BlackRock’s indexes that have deforestation-linked companies in them. The California Public Employees’ Retirement System is another fund that has labeled deforestation-linked commodity companies as a serious investment risk. Meanwhile, BlackRock has taken no such action.
“Responsible stewardship is about more than just nice public statements. It is about aligning your investment strategy with broadly accepted environmental and social standards,” said Ward Warmerdam of Profundo. “It is about implementing this strategy by making demands of the companies you are invested in. And it is about using your significant leverage to ensure that your demands are met and irreversible environmental and social damage is prevented, in addition to fulfilling your fiduciary duty.”
Diving down the rabbit hole of BlackRock’s holdings shows that its investments in deforestation-risk companies have been increasing over the last half-decade.
BlackRock has made tremendous investments in pulp and paper and palm oil companies, as well as investments in beef, rubber, and timber, with many of these companies operating in South America. BlackRock’s investments in pulp and paper increased from $103 million in 2014 to $565 million in 2018, a 548% gain in value.
And with BlackRock channeling global investment capital into deforestation-risk companies that are destroying the Amazon and the world’s forests, it seems that Wall Street is perfectly fine with burning down the Amazon for a profit.