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.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
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