However,the restriction only applies to companies that generate more than 25 per cent of their revenues from thermal coal,thus allowing BlackRock to put money in major producers such as BHP and Glencore. The new policy also only applies to the company's actively managed funds,that make up 27 per cent of total assets,and not its passive products which track the performance of indices.
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Market Forces campaigner Will van de Pol said there was growing demand for indexes that screened out thermal coal,oil and gas assets,particularly in Europe.While he welcomed BlackRock's general stance on climate change,he said passive funds should be subjected to the same sustainability filters as active funds.
"Excluding thermal coal from active portfolios is something a lot of investors have been doing for quite some time anyway,"said Mr van de Pol."BlackRock has a far bigger passive portfolio than active."
Lonsec's head of sustainability Tony Adams said it was difficult,but not impossible,to screen out coal companies because these companies often produced both thermal coal – that used for energy – and coking coal,that used to make steel."There are very few companies that only have thermal coal,no other kinds of coal. It's not a clean line,"Mr Adams said.
The Age andThe Sydney Morning Heraldreported earlier this month that five of the nation's biggest super funds still have billions of dollars invested in coal companies and other fossil fuel producers,much of which is in passive products.