BlackRock and Flatrock have something in common

BlackRock, the world’s largest asset manager with about $7 trillion under management and Flatrock Solar, one of the largest solar power companies on the west side of Durango, Colorado, have something in common; climate change.

In mid January of 2020, BlackRock announced that it will be looking for companies that it invests in to account for the impacts of climate change on their balance sheets. Flatrock Solar accounts for its existence mainly because of a concern about climate change. This is about where the two companies diverge in their similarities.

BlackRock has said that it will start to be inclined to vote against boards and management that don’t acknowledge the risks of climate change and have plans to mitigate the impacts on the companies they oversee and manage. This is not because BlackRock executives had a spiritual experience on a company team building weekend in the woods that involved some plants that are legal in some states, its because of…money. That’s what BlackRock does, make money, manage money, tries to not lose other people’s money, etc. To quote the CEO of BlackRock, Laurence Fink, “Climate change has become a defining factor in companies’ long-term prospects. The evidence on climate risk is compelling investor to reassess core assumptions about modern finance.”

BlackRock has already begun to get flack from their new position on climate change and I want to be clear that I think its great they are acknowledging its existence, but they aren’t doing it because they’ve turned in to a bunch of long haired tree huggers. They are doing it because they want to still be around in 50 years and not lose other people’s money.