Big Coal Escapes BlackRock’s New Climate Plan – by Thomas Biesheuvel (Bloomberg News – January 14, 2020)

(Bloomberg) — BlackRock Inc. will cut exposure to thermal coal as the world’s largest asset manager moves to address climate change, but that doesn’t mean it’s selling out of the biggest producers — including top shipper Glencore Plc.

Producers of the dirtiest fuel are coming under increasing pressure from money managers to either abandon the business or show plans for an eventual exit. What investors don’t agree on, is how to measure progress and whether companies are complying.

BlackRock’s discretionary active investment portfolios will sell out of all companies that get more than 25% of sales from thermal coal, Chief Executive Officer Larry Fink wrote in a letter to clients that outlined a plan to put climate considerations at the center of its strategy. There isn’t a long-term economic or investment rationale for continuing to invest in the fuel, he said.

However, the revenue threshold means that large, diversified miners — which also rank among the largest coal producers — won’t be affected. Glencore, of which BlackRock owns 6%, is the single biggest coal shipper, mining about 130 million tons last year. Yet its thermal coal revenues accounted for less than 10% of the total, thanks to the contribution from its giant trading operations.

Major coal producers Anglo American Plc and BHP Group also comfortably escape the cap.

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