BlackRock Announces Major Shift Making Climate Change Central to Investment Decisions

On January 14th, BlackRock’s CEO Larry Fink issued his annual letter to portfolio company CEOs, this year titled “A Fundamental Reshaping of Finance.” The letter focuses on the potential effect that climate change will have on both the “physical world and the global system that finances economic growth.” Fink notes that sustainability-and climate-integrated portfolios can provide better risk-adjusted returns to investors, linking to another January 14 publication (“Sustainability as BlackRock’s New Standard for Investing”) that identifies a number of climate initiatives and plans at BlackRock and expands on some of the themes in the main letter.

KEY TAKEAWAYS:

• If your board has not already assigned responsibility for oversight of sustainability-related matters, it should do so now.

• Companies should carefully review relevant SASBand TCFDstandards to determine whether those metrics make sense for their companies and, if not, begin constructing alternative metrics now.

• Get credit for what your company has already done with brief but clear disclosure in your next proxy statement.

Please see full Publication below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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