BlackRock’s exit from once-heralded net-zero group creates climate finance chaos
The asset manager's withdrawal follows the departure by the Big Six U.S. banks from another net-zero alliance, raising in short order questions about the future of financing climate goals. Read More

The future of collective climate action in the financial sector faces new uncertainty, less than four years after splashy alliances formed to help materialize a low-carbon future for the global economy.
The world’s largest group of asset managers aligning on net-zero efforts by 2050 hit the pause button Jan. 13. The decision by the Net Zero Asset Managers (NZAM) to put its activities on hold follows the departure four days earlier by BlackRock, a founding member and the world’s largest asset manager with more than $11 trillion in assets under management.
Last year, the asset manager initiative included firms that collectively manage over $57.5 trillion. The loss of BlackRock, the giant of its industry, also reflects a dramatic shift in tone by CEO Larry Fink. His provocative annual letters to investors since at least 2020 had helped galvanize the industry’s collective alignment with the Paris Agreement.
Climate advocacy groups were quick to criticize BlackRock.
“Membership in voluntary alliances sets an important baseline, but to truly fulfill its fiduciary duty to long-term investors, BlackRock must support real-world decarbonization through stronger shareholder voting and by directing capital toward industries that mitigate systemic climate risks,” stated Ben Cushing, campaign director for the Sierra Club’s Fossil-Free Finance campaign. “If BlackRock won’t do that, its clients should find a different asset manager that will.”
Big financial alliances shift priorities
Meanwhile, the NZAM’s umbrella organization, the Glasgow Financial Alliance for Net Zero (GFANZ), shared Jan. 2 that it is restructuring. GFANZ announced a new focus on supporting transition finance in developing nations which, while important, significantly slims its original ambitions to move economies toward low-carbon activities. It’s a sharp turn from the Glasgow alliance’s optimistic launch in April 2021 by U.N. Special Envoy for Climate Action and Finance Mark Carney.
In addition, since early December the six largest U.S. banks have fled another GFANZ sub-group. The Net Zero Banking Alliance (NZBA) lost JPMorgan Chase on Jan. 7 in the footsteps of peers Goldman Sachs, Wells Fargo, Citigroup, Bank of America and Morgan Stanley.
“Now, GFANZ is separating itself from the net zero sector alliances and as a result GFANZ members are not required to have a net zero target,” WWF Global Lead Finance Practice Aaron Vermuen wrote on LinkedIn. “While its members may still continue to pursue their existing decarbonization targets, it is unfortunate that an alliance created to help deliver net zero emissions has faced political pressure to weaken its membership criteria.”
NZAM’s rapid expansion, recent contraction
After launching in December 2020, the NZAM reached a self-described “net zero tipping point” in 2021. Nearly half of the asset management sector had joined within six months.
By October, NZAM counted 330 signatories holding $57.5 trillion in assets. Although 26 asset management companies had left the alliance since April, a handful more than that had joined in the same time period.
However, by Jan. 14, the group’s webpage, formerly showcasing signatories’ names, instead featured one sentence about “launching a review of the initiative to ensure it remains fit for purpose in the new global context.”
Fink’s letters
Many sustainability practitioners heralded Larry Fink’s January 2020 letter to CEOs, “A Fundamental Reshaping of Finance,” as a game-changer for positioning action on climate risk as a mandate for financial institutions. It also increased criticism of BlackRock’s extensive holdings in oil and gas majors and its support for new coal projects.
Fink’s 2020 letter repeated the word “climate” more than 20 times, escalating the climate-related themes he had touched on in letters as far back as 2016, and notably in 2018.
By October 2022, a right-wing backlash against ESG was in full steam. “I’m now being attacked equally by the left and the right, so I’m doing something right, I hope,” Fink told the Institute of International Finance conference in Washington, D.C.
But by late March, Fink’s annual letter led with a personal anecdote that focused on the safer topics of financial security and retirement. “Climate” appeared only a handful of times. A large section on the energy transition emphasized “energy pragmatism.”
“The energy market isn’t divided the way some people think, with a hard split between oil and gas producers on one side and new clean power and climate tech firms on the other,” Fink wrote. “The point is: The energy transition is not proceeding in a straight line.”
What gives?
There’s plenty of speculation about the reasons. Political risks are one factor, according to some expert observers. For instance, companies may be lying low as a new federal administration that vocally opposes ESG activities comes to power in Washington, D.C.
One cynical view is that companies only jumped on the bandwagon to join alliances while it was trendy, knowing that nothing would later legally hold them accountable if they failed to meet the collective goals.
Further, the fine print of the GFANZ commitments acknowledged that success depended upon a policy environment supportive of the transition to a 1.5 degree Celsius-aligned economy.
“The lack of consistent frameworks contributes to the barriers businesses face as they seek to accelerate the net-zero transition and adjust their business strategy with credible, science-based targets,” a GFANZ report noted in September 2022.
“For the last week, we’ve been watching the dramatic and irrefutable ways in which extreme climate and nature risk is imperiling our cities and communities, while simultaneously, political pressure mounts in opposition to investment industry collaborations seeking to achieve net zero targets and build more resilient companies and economies,” BSR President and CEO Aron Cramer told Trellis.
“In this context, broad participation in collaborative efforts to achieve net zero targets is very valuable, but the real question concerns what companies and investors are doing to deliver on their commitments.”
