Billionaire BlackRock CEO Larry Fink recently expressed frustration with the pervasive anti-Environmental, Social, and Governance (ESG) sentiment driving many investors away from institutions that promote it in their investments. A commonly held criticism of ESG is that it could violate a financial institution’s fiduciary responsibility if they prioritize these woke factors instead of solely generating returns for their clients.
Recently, BlackRock lost an $8.5 billion contract with the Texas Board of Education, which pulled its portfolio out of the firm. Texas and several other red states have moved to block official state funds from being invested in companies like BlackRock, which pursue an ESG agenda.
However, during an earnings call, Fink lashed out at what he called “lies” and “misinformation” about the ESG movement. The CEO asserted that the hesitation toward ESG is largely propagated by individuals seeking short-term political gain, maintaining that their ESG activism is in line with long-term fiduciary responsibility.
“I’ve spoken before about the fear we see today, some of it stoked by increasingly political polarization in the world. Our industry, and BlackRock have been a subject of political dialogue, mostly in the United States. We recognize some of this with being the industry leader,” Fink told investors on the earnings call.
Fink further claimed, “We have done a better job now of telling our story so that people can make decisions based on facts, not on lies, and not misinformation or politicization by others. Unfortunately, there’s still others out there who put short-term politics, who continuously lie about these issues. They’re putting those issues above the long-term fiduciary responsibilities. As a fiduciary politics, should never outweigh performance. I do believe that with a vast majority of our clients, our long term fiduciary, fiduciary approach and performance are resonating.”
Alongside Texas, Florida has been another state that has proactively fought against the ESG movement. The American Tribune reported on Gov. Ron DeSantis pulling approximately $2 billion in funds from BlackRock over the company’s stance on incorporating ESG as an investment criterion.
JUST IN: @BlackRock CEO Larry Fink *absolutely lost it* on their latest earnings call, after the Texas Permanent School Fund pulled $8.5 billion from the woke asset manager over their continued ESG activism:
— Will Hild (@WillHild) April 12, 2024
In late 2022, Florida announced it would be freezing nearly $1.43 billion in long-term securities and almost $600 million that BlackRock was managing. Florida’s State Chief Financial Officer Jimmy Patronis criticized the company for its endeavors, suggesting BlackRock was seeking to influence
“Whether stakeholder capitalism, or ESG standards, are being pushed by BlackRock for ideological reasons, or to develop social credit ratings, the effect is to avoid dealing with the messiness of democracy.” Patronis continued explaining how financiers can use their influence to go beyond political procedures to enact societal change.
“I think it’s undemocratic of major asset managers to use their power to influence societal outcomes. If Larry (Fink), or his friends on Wall Street, want to change the world — run for office. Start a non-profit. Donate to the causes you care about. Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” Patronis continued.
Larry Fink has publicly commented on his disdain for the politically charged nature of the term “ESG” which has become undeniably conflated with the woke agenda. As a result, the BlackRock CEO claims he doesn’t even like using the term anymore.
"*" indicates required fields