BlackRock, which is the worldโs biggest asset management company, is being accused of allegedly contributing to environmental and human rights abuses around the world through its investments in agribusiness.
Friends of the Earth US and the Articulation of Indigenous Peoples of Brazil have accused BlackRock of increasing investments in companies that have been implicated in the devastation of the Amazon and other major forests despite warnings that this is destabilising the global climate, damaging ecosystems and violating the rights of traditional communities.
The complaint was filed under the OECD Guidelines for Multinational Enterprises, which are recommendations from governments to private companies on responsible business conduct. In the absence of legally binding international regulations, these are seen as a reference for corporate accountability.
BlackRock wields enormous influence, managing more than $11tn in assets, more than the combined government spending of the worldโs 10 wealthiest countries. Although investment decisions are the responsibility of its clients, this giant financial institution provides advice and facilitates investments.
Read also: African leaders demand Increase in Climate Finance for adaptation, Green Growth
Two thirds of the assets BlackRock manages on behalf of clients relate to retirement. Highlighting the forward-looking nature of these pension funds, the company website notes: โBlackRockโs mission is to create a better financial future for our clients, by building the most respected investment and risk manager in the world.โ
That claim is countered by the new complaint, which states that pension funds and other assets managed by BlackRock are threatening a stable future because they provide capital for companies responsible for deforestation of tropical rainforests, which adds to global climate disruption.
โWe hope this complaint prompts BlackRock to fulfill its obligations under international frameworks and steer investment away from agribusinesses driving climate chaos and gross human rights abuses,โ said Gaurav Madan, senior forest and land rights campaigner at Friends of the Earth US.
BlackRock said the case was spurious. โThis complaint is meritless. As a fiduciary, our focus is to help our clients achieve their selected investment goals. The overwhelming majority of holdings referenced are held in index funds chosen by our clients themselves, and we cannot selectively divest from them,โ a spokesperson said in an email statement.
Story was adapted from the Guardian.
