Climate activists protesting BlackRock Inc that invests in fossil fuel production, outside their headquarters in New York, in this file photo from Sept 13, 2023. Six years after the financial industry pledged to use trillions to fight climate change and reshape finance, its efforts have largely collapsed. — Victor J. Blue/The New York Times
IN January 2020, Larry Fink, CEO of BlackRock, the world’s largest asset manager, stunned the business world by declaring he would use the trillions his firm manages to tackle global warming.
“Every government, company and shareholder must confront climate change,” Fink wrote, calling for “a fundamental reshaping of finance.”
Days later, he arrived at the World Economic Forum in Davos wearing a scarf featuring the “warming stripes”, a pattern showing 150 years of rising global temperatures.
His call marked the unofficial start of a movement.
Soon, nearly every major financial institution pledged to reduce emissions, joining alliances to phase out fossil fuels and support clean energy.
Environmental, social and governance factors – ESG – became a defining feature of Wall Street investing.
But six years later, much of that commitment has unravelled.
Alliances like the Net Zero Banking Alliance and the Net Zero Asset Managers initiative have largely collapsed.
Investors have pulled tens of billions from ESG funds, while mentions of “climate” and “sustainability” on company earnings calls have plunged 75% in the past year, according to Bloomberg.
US investment in clean energy has boomed, reaching US$279bil last year, yet many corporations have gone silent.
With President Donald Trump back in office promoting fossil fuels, Wall Street’s retreat coincides with American banks doubling down on coal, oil and gas projects.
The collapse began almost as soon as Fink and his allies announced their ambitions. Republican politicians and conservative activists, backed by fossil fuel interests, engineered a pushback against what they saw as corporate America advancing liberal policies.
“These institutions signed up without having any clue what they were signing up for,” said Paddy McCully, analyst at Reclaim Finance. “They wanted to look good, but never intended to change their business model.”
The rise of ESG
Money, more than morality, got Wall Street moving on climate.
In 2019, major clients including sovereign wealth and pension funds started asking for environmentally-focused funds.
BlackRock obliged, designing new ESG products.
“Larry decided to be a leader in the bandwagon,” said Mindy Lubber, CEO of Ceres. “It worked out until it didn’t.”
Other US banks followed.
JPMorgan pledged financing aligned with the Paris Agreement; Bank of America and Citigroup made similar commitments. The ambition was clear: drive investment towards clean energy and reduce emissions.
But hitting Paris Agreement targets would have required a swift global shift away from fossil fuels – threatening lucrative lines of business.
Fink’s 2021 letter promised reporting on climate impact, custom sustainability products, new climate risk measures and shareholder engagement to push companies towards green practices.
That same year, COP26 in Glasgow became a platform for private-sector climate pledges.
Mark Carney, fresh from the Bank of England, convened the Glasgow Financial Alliance for Net Zero (GFANZ), which claimed to harness US$130 trillion in assets to stop global warming. Over 450 financial groups, including BlackRock, Bank of America and Citi, signed on.
Joining GFANZ and its subgroups – the Net Zero Banking Alliance, the Net Zero Asset Managers initiative and others – required little more than an expression of good intentions.
“Mark Carney pitched this as a money- making opportunity,” said Evan Guy, former GFANZ adviser. “There were trillions to be made.”
BlackRock attracted nearly US$25bil in new ESG assets in 2021. The movement was global, ambitious and well-meaning – at least on paper.
Backlash and collapse
While Glasgow promoted ESG, Republican state treasurers in Florida were plotting a counterattack.
They withdrew more than US$1bil from BlackRock and pressured Wall Street to abandon climate initiatives. Conservative think tanks, fossil fuel groups and right-wing funders joined the push.
By the end of 2022, Republican investigations and congressional subpoenas targeted BlackRock, GFANZ and Wall Street over ESG practices.
Then, after Trump’s reelection in 2024, nearly every major US bank withdrew from the Net Zero Banking Alliance, causing the group to fold. The Net Zero Asset Managers initiative followed, temporarily suspending operations.
Bank of America walked back pledges to stop financing coal and Arctic drilling.
BlackRock slashed support for social and environmental shareholder proposals.
Chris Berger, a BlackRock spokesman, said the company “built the industry’s largest platform for investing in sustainable business practices”, with over US$1 trillion in assets.
Yet, in Fink’s latest letter, climate change went unmentioned. Instead, he promoted “energy pragmatism”.
“In the end,” said a former BlackRock executive who requested anonymity, “it was a bunch of empty promises from a bunch of Wall Street types who abandoned their pledges when it was no longer convenient. We marched up the hill and we marched back down it.” — ©2026 The New York Times Company
This article originally appeared in The New York Times.
