BlackRock adds list to investors in warning of environmental dangers to Great Barrier Reef ecosystem
Aside from tweets from celebrities and lawsuits, the dangers to the Great Barrier Reef stemming from the coal and natural gas projects in Australia's northeast coast are also getting the attention of investors, with BlackRock the newest investor to flag the dangers, Bloomberg News reported.
The demand for energy in Asia has led to the construction of a liquefied natural gas and coal terminal in the coast. Advocates for the environment and groups in the community could say that the $65 billion development could be detrimental to the Great Barrier Reef and lead to climate change, the report said.
Pru Bennett of BlackRock Inc told Bloomberg in an interview, "It's a huge issue potentially for any company operating in the Great Barrier Reef if there is a failure of management systems from an environmental perspective. The reputational damage that could be done, and the potential to lose that social license to operate, is very high." Bennett is the Asia Pacific Director of Corporate Governance and Responsible Investment who is based in Hong Kong who has already extensively explored the reef by sailing, diving and touring it by helicopter, the report said.
Bennett added that if the portfolio manager would find that the environmental concerns aren't being addressed sufficiently then they can opt to offload an active holding. However, the story is different with indexed holdings. She said, "If it's an indexed holding, and a lot of our investments in Australia are indexed, then selling is not an option."
The Great Barrier Reef is a World Heritage site. It is home to 3,000 coral reefs, thousands of fish species, marine turtles, sharks and rays. The United Nations Educational, Scientific and Cultural Organization or UNESCO said that climate change, port developments, gas export facilities, extreme weather changes and grounding of ships are some of the hazards faced by the reef, Bloomberg reported.