Sierra Club warns BlackRock it may pull $12 million over climate stance

By Simon Jessop and Ross Kerber

LONDON/BOSTON (Reuters) – Leading U.S. environmental group the Sierra Club has warned BlackRock Inc (NYSE:) it may pull a $12 million investment after the money manager said it would likely support fewer climate-focused shareholder resolutions at annual company meetings this year.

The world’s biggest asset manager said this month it was less likely to support such votes as many were too prescriptive in their demands and not in the interests of clients.

The Sierra Club Foundation believes the asset manager’s stance put it at odds with the goal of mitigating the harms of climate change, it said in a May 24 letter to BlackRock Chief Executive Larry Fink and other executives seen by Reuters.

The Foundation, which oversees some $220 million in assets, currently invests with BlackRock through Aperio, a unit that runs managed accounts.

“With this publication, we have come to conclude that BlackRock and Aperio are not acting in Sierra Club Foundation’s long-term financial and mission-related interests,” Dan Chu, executive director at the Foundation, and several colleagues, said in the letter.

A BlackRock spokesman said the company’s proxy votes are “based solely on the long-term economic interests of our clients.” BlackRock also allows many investors to chose how their proxy votes are cast, including clients of Aperio, the spokesman said.

BlackRock has sought to position itself as a leader in sustainable investing, but its efforts have drawn criticism from U.S. clients on various sides of issues like climate change which have grown more politicised.

On CNBC on Tuesday, U.S. Senator Ted Cruz, a Texas Republican, BlackRock’s Fink for what Cruz said was his “massive and inappropriate ESG pressure.”

The letter from Sierra Club leaders said part of their purpose is to mitigate harms of climate change. BlackRock’s “work in this regard hardly assists us in our fiduciary duties, and in fact, runs counter to them.”