BlackRock's chief executive has warned it will not act as "the environmental police" in the latest sign the world's largest money manager is shying away from green activism.
Larry Fink said it is wrong to ask the private sector to ensure that the companies they invest in are doing their part to combat climate change.
He commented in an interview: "I don't want to be the environmental police."
The US multinational investment-management corporation manages around £7.3trillion in assets, giving it significant stakes and influence in many of the world's largest businesses.
The Telegraph says Mr Fink's comments represent a significant U-turn for BlackRock which had been at the forefront of Wall Street's push to focus on environmental, social and governance (ESG) investing.
It comes after the asset manager warned last month that it will vote against most shareholder resolutions on climate change this year as they are too extreme.
The company said it was concerned about proposals to stop financing fossil fuel companies, including forcing them to decommission assets and setting absolute targets for reducing emissions in their supply chains.
In January 2020, Mr Fink had stated that "climate risk is investment risk" as he positioned BlackRock as a leader in ESG investing. He also warned that climate change posed the biggest ever risk to financial markets.
The decision to distance itself from "prescriptive" climate change policies comes as institutional investors face criticism for allegedly pushing political agendas.
However, the Telegraph reports that BlackRock has been a target of criticism from both climate activists and those who promote a more gradual transition to green energy.
In recent months, the asset manager has said that Russia's invasion of Ukraine has impacted the transition to net-zero, adding that short-term investment in traditional energy sources is now required to boost security.
BlackRock's latest stewardship report also stated that the business will not support proposals that could lead to firms being "micromanaged".
FTSE 100
The UK's top share index, the FTSE 100, was down eight points at 7,600 shortly after opening this morning, following yesterday's 75-point gain.
Brent crude futures were 0.69% higher at $120.34 a barrel.
Companies reporting today
- Full-year results: LXi REIT