BlackRock, the world’s biggest asset management company, faces a complaint at the Organization for Economic Co-operation and Development (OECD) for allegedly contributing to environmental and human rights abuses around the world through its investments in agribusiness.
Friends of the Earth US and the Articulation of Indigenous Peoples of Brazil accuse BlackRock of increasing investments in companies that have been implicated in the devastation of the Amazon and other major forests despite warnings that this is destabilising the global climate, damaging ecosystems and violating the rights of traditional communities.
The complaint, revealed exclusively to the Guardian, was filed under the OECD Guidelines for Multinational Enterprises, which are recommendations from governments to private companies on responsible business conduct. In the absence of legally binding international regulations, these are seen as a reference for corporate accountability.
The influence of BlackRock is enormous. It manages more than $11tn in assets, more than the combined government spending of the world’s 10 wealthiest countries. Although investment decisions are the responsibility of its clients, this giant financial institution provides advice and facilitates investments.
Two thirds of the assets BlackRock manages on behalf of clients relate to retirement. Highlighting the forward-looking nature of these pension funds, the company website notes: “BlackRock’s mission is to create a better financial future for our clients, by building the most respected investment and risk manager in the world.”
That claim is countered by the new complaint, which states that pension funds and other assets managed by BlackRock are threatening a stable future because they provide capital for companies responsible for deforestation of tropical rainforests, which adds to global climate disruption.
“We hope this complaint prompts BlackRock to fulfill its obligations under international frameworks and steer investment away from agribusinesses driving climate chaos and gross human rights abuses,” said Gaurav Madan, senior forest and land rights campaigner at Friends of the Earth US.
BlackRock said the case was spurious. “This complaint is meritless. As a fiduciary, our focus is to help our clients achieve their selected investment goals. The overwhelming majority of holdings referenced are held in index funds chosen by our clients themselves, and we cannot selectively divest from them,” a spokesperson said in an email statement to the Guardian.
At an industry level, asset management companies say they cannot use clients’ money for third-party objectives because it is up to individual investors to select funds and allocate money. Finance firms have also previously argued that they are not responsible for index funds, which are investments in a range of assets in a given industrial, national or regional sector.
Friends of the Earth say the latter argument has been challenged in several international contexts, including an earlier OECD case against the Swiss Bank UBS over its use of index funds connected to a company allegedly involved in the Chinese government’s mass surveillance of Uyghurs in Xinjiang. In 2021, the UN Office of the High Commissioner for Human Rights has also confirmed there is a business relationship between a financial institution and an investee company in the context of minority shareholdings and index fund investments.
To support their complaint, Friends of the Earth investigated publicly available data on BlackRock’s shareholdings between January 2019 and June 2024 in 20 agribusiness companies that have been implicated in environmental and human rights abuses, operating in the palm oil, pulp/paper, soy, cattle, timber and biomass sectors. It found BlackRock has more than $5bn invested in these companies, an increase since 2019 of $519m. In each of the companies is it a top 10 shareholder.
Conservation organisations and Indigenous peoples have repeatedly asked BlackRock to stop financing companies that deforest the Amazon and violate communities’ land rights, said Dinamam Tuxá, executive coordinator of the Articulation of Indigenous Peoples of Brazil (APIB). “BlackRock has failed to prevent its investments from endangering entire peoples’ way of life,” he said in a statement. “For the sake of our future, we call on BlackRock to stop making excuses and stop funding companies driving deforestation, biodiversity loss, and violence against our communities.”
The need for stronger action was apparent in a recent report showing that destruction of global forests rose last year and is now higher than when 140 countries promised three years ago to halt deforestation by the end of the decade. The combination of land clearance, forest fires and global heating has pushed the Amazon closer towards a point of no return. Many areas are currently experiencing the worst drought on record.
More broadly, major US financial institutions have been accused of watering down public commitments on the climate and nature crises. Last month, Client Earth filed a complaint in France alleging BlackRock greenwashed investments in fossil fuel companies through “sustainable” funds. In July, JP Morgan Chase, the world’s biggest investor in fossil fuels, was warned by US senators that it may have misled investors and the public by backtracking on its already weak climate and environmental commitments.
The watchdog NGO Stand.earth also condemned five of the world’s biggest banks, for having environmental and social guidelines that failed to cover more than 70% of the Amazon rainforest. On the streets, the climate finance movement has staged protests outside several Wall Street institutions, including Citi, Bank of America and major insurers.
