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BlackRock ( BLK ) cites legal inquiries for leaving NZAMI

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Republicans criticize climate efforts as 'woke capital'

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BlackRock's ( BLK ) exit may influence other asset managers

By Ross Kerber

Jan 9 (Reuters) - BlackRock ( BLK ), the world's biggest

asset manager, said on Thursday it will leave the Net Zero Asset

Managers initiative, Wall Street's latest environmental

step-back amid antitrust concerns raised by Republican

politicians.

BlackRock ( BLK ), which manages some $11.5 trillion, said that with

two-thirds of its global clients committed to cutting emissions

to net zero, it had made sense to join groups like the

organization known as NZAMI.

"However, our memberships in some of these organizations

have caused confusion regarding BlackRock's ( BLK ) practices and

subjected us to legal inquiries from various public officials,"

leading to the departure, according to a client letter shared by

a company representative.

NZAMI members pledge to support the goal of net zero

greenhouse gas emissions by 2050, using influence such as how

they vote their proxies at corporate meetings. The group

currently counts more than 325 signatories managing more than

$57.5 trillion, according to its website.

Major Wall Street lenders have left a similar climate

organization for banks in recent weeks ahead of the return of

Republican U.S. President-elect Donald Trump and other

Republicans to Washington. While the departures may not have a

direct effect on lending or share purchases, the companies'

participation was seen as a marker of investors' environmental

priorities.

BlackRock's ( BLK ) exit in theory could prompt others to follow

suit, though on Thursday a representative for the

asset-management arm of State Street Corp ( STT ), a BlackRock ( BLK )

rival, said it remains a member.

CLEANING THINGS UP

Efforts such as NZAMI, which was created in 2020 and boosted by

a 2021 United Nations climate conference, began without

controversy as world leaders looked for ways to harness capital

to transition the world to cleaner energy sources.

But Republicans, many from energy-producing states, have

disparaged the efforts as "woke capital" and have painted them

as violating antitrust laws.

In December a Republican-led congressional committee sought

information from BlackRock ( BLK ) and dozens of other asset managers

involved with NZAMI. In November BlackRock and rivals were sued

by Texas and 10 other Republican-led states that claimed their

activism cut coal production and boosted energy prices.

BlackRock ( BLK ) has denied wrongdoing and said the lawsuit

"discourages investments in the companies consumers rely on."

In Thursday's client letter, BlackRock ( BLK ) said its departure

"does not change the way we develop products and solutions for

clients or how we manage their portfolios. BlackRock's ( BLK ) active

portfolio managers continue to assess material climate-related

risks, alongside other investment risks, in delivering for

clients."