Larry Fink, founder and chief executive of the investment firm Blackrock, at his offices in New York, on Aug. 10, 2016.
DAMON WINTER/The New York Times
BlackRock Inc., the world’s largest fund manager, is accelerating its push to reduce the risks of climate change for clients, asking corporate leaders to disclose how their companies will fare in a “net-zero” economy and selling its stakes in those that fail to live up to heightened standards.
BlackRock chief executive officer Larry Fink said in his annual letters to the CEOs of companies in the firm’s portfolio and to BlackRock clients that the COVID-19 pandemic has intensified the reallocation of capital to investments with lower-climate risk. Activity boomed as countries made new pledges to get to net zero – when greenhouse gas emissions are simultaneously reduced and offset – as they plotted economic recovery.
From January to November last year, investors around the world plowed US$288-billion into mutual funds and exchange-traded funds with sustainable assets, nearly double the the tally of 2019, he said.
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Mr. Fink’s comments show how New York-based BlackRock, which manages US$8.7-trillion in assets on behalf of pension funds, sovereign wealth funds and other clients, has quickly built on its market-moving pronouncements of a year ago. Mr. Fink made headlines by saying BlackRock would part ways with companies that generate more than 25 per cent of their sales from thermal coal, and set up new ETFs that filter out fossil fuel investments.
It was seen as a wake-up call for the corporate world, and several other major investors have since made similar announcements. On Tuesday, Mr. Fink described the change in investor preference for more sustainable opportunities as a “tectonic shift.”
“Given how central the energy transition will be to every company’s growth prospects, we are asking companies to disclose a plan for how their business model will be compatible with a net zero economy – that is, one where global warming is limited to well below 2 degrees Celsius, consistent with a global aspiration of net-zero greenhouse gas emissions by 2050,” Mr. Fink wrote in his letter to CEOs.
“We are asking you to disclose how this plan is incorporated into your long-term strategy and reviewed by your board of directors.”
Governments in the European Union, China, Japan, South Korea and Canada have pledged to achieve net-zero emissions in the coming decades. Under new President Joe Biden, the United States has committed to rejoining the Paris Agreement on battling climate change. No company will be unaffected by the transition, and gathering and assessing data will be key, Mr. Fink said.
“Of course, investors cannot prepare their portfolios for this transition unless they understand how each and every company is prepared both for the physical threats of climate change and the global economy’s transition to net zero,” Mr. Fink said.
Last year, BlackRock asked all companies in its portfolio to disclose information about climate-change risk and social and governance issues in step with guidelines established by the Sustainability Accounting Standards Board and the Task Force on Climate-related Financial Disclosures.
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Mr. Fink said he is urging all companies to begin disclosing climate data in line with the TCFD standard before regulators begin to mandate such reporting. Last week, an Ontario government task force recommended the Ontario Securities Commission require companies to adopt such disclosure.
In its active investing portfolios, BlackRock is adopting a “heightened scrutiny model,” applying its risk-management tools to identify particularly high climate risk among companies owing to high carbon intensity and insufficient preparation for the energy transition.
“Where we do not see progress in this area, and in particular where we see a lack of alignment combined with a lack of engagement, we will not only use our vote against management for our index portfolio-held shares, we will also flag these holdings for potential exit in our discretionary active portfolios because we believe they would present a risk to our clients’ returns,” Mr. Fink wrote in his letter to clients.
“Conversely, we believe companies that distinguish themselves in terms of their emissions trajectory, transition preparedness and governance will often represent an opportunity for our clients.”
Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. Reach him at jeffjones@globeandmail.com.
CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.
It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.
The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.
Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.
TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.
The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Nov. 7, 2024.
BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.
The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.
On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.
“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.
“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”
Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.
BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.
The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.
BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.
It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.
The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”
Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.
This report by The Canadian Press was first published Nov. 7, 2024.
TORONTO – Canada Goose Holdings Inc. trimmed its financial guidance as it reported its second-quarter revenue fell compared with a year ago.
The luxury clothing company says revenue for the quarter ended Sept. 29 totalled $267.8 million, down from $281.1 million in the same quarter last year.
Net income attributable to shareholders amounted to $5.4 million or six cents per diluted share, up from $3.9 million or four cents per diluted share a year earlier.
On an adjusted basis, Canada Goose says it earned five cents per diluted share in its latest quarter compared with an adjusted profit of 16 cents per diluted share a year earlier.
In its outlook, Canada Goose says it now expects total revenue for its full financial year to show a low-single-digit percentage decrease to low-single-digit percentage increase compared with earlier guidance for a low-single-digit increase.
It also says it now expects its adjusted net income per diluted share to show a mid-single-digit percentage increase compared with earlier guidance for a percentage increase in the mid-teens.
This report by The Canadian Press was first published Nov. 7, 2024.
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