Sierra Club Foundation Drops BlackRock as Its Fund Manager

In an effort to safeguard its assets, the US-based non-profit charitable organisation Sierra Club Foundation announced that it was leaving BlackRock/Aperio as an asset manager and moving funds to Nia Impact Capital and Xponance.

This follows over three years of active engagement with BlackRock by the Sierra Club Foundation, after sending the firm a letter in May 2022 placing it “on watch” for not meeting the expectations of the Foundation as a client.

Nia Impact Capital is a women-led impact investing firm, with a unique active ownership approach that lends to responsible sustainable investing. In particular, they offer voting choices in alignment with climate and decarbonisation, tailored options for proxy voting, and impact investing opportunities to invest in public companies pushing forward climate solutions.

Nia’s portfolios have also been fossil fuel free since their inception. Xponance, a Black-founded and Black-majority-owned multi-strategy investment firm, similarly, boasts a focus on sustainable and client-first investing.

The decision to switch asset managers follows refusal by BlackRock to address the systemic financial implications of the climate crisis in its investment and stewardship decisions. BlackRock continues to promote a dangerous all-of-the-above energy strategy that is accelerating the climate crisis and putting its clients’ investments at risk.

BlackRock recently cut its support for shareholder proposals linked to environmental and social issues to a new low of 4.1%, and in January, they announced they would leave the Net Zero Asset Managers Initiative (NZAMI).

Additionally, Sierra Club Foundation was informed recently that Blackrock has made significant changes to the climate and decarbonisation guidelines that were developed in July 2024 in consultation with stakeholders. BlackRock’s page on value aligned investing currently goes to a broken link.

Reasons

Paul Rissman, an emeritus board member of the Sierra Club Foundation said that climate risk was a financial and a responsible fund manager must consider and proactively address the economy-wide financial risks posed by systemic threats like climate change.

“BlackRock has refused to fulfil its fiduciary duty to long-term investors and support real-world decarbonisation through stronger stewardship practices, which is why it is no longer a responsible manager for the Sierra Club Foundation’s assets,” Rissman added.

Ben Cushing, Director of the Sierra Club’s Sustainable Finance campaign, said that the Foundation was setting a strong example for other institutional investors by better aligning its assets with its mission and fiduciary responsibility in the face of mounting systemic risks.

Cushing added: “By moving funds to more responsible asset managers that are proactively addressing the profound financial risks of the climate crisis, the Sierra Club Foundation is leading by example, and taking steps to ensure its investments are managed responsibly and sustainably to support the mission of the organization for the long term.”

Research on the impact of climate change on the global economy estimates that climate change costs the world $16 million every hour. Scientists estimate that the climate crisis will do at least $38 trillion in damages every year by 2049—a price tag larger than the entire US economy, and could cause a 40% hit to global stock values. No industry is safe from that risk.

Given this, investors must treat climate change not just as a risk to individual companies, but as a threat to the entire economy and long-term portfolio returns. That kind of risk cannot be avoided just by trading assets or holding climate-friendly firms, the Foundation said.