BlackRock CEO Larry Fink recently admitted that recent political initiatives from Florida Governor Ron DeSantis hurt the woke investment firm. In 2022, DeSantis moved to pull roughly $2 billion in assets that Fink’s company managed. BlackRock has taken a number of woke positions in recent years, particularly with the environmental, social, and corporate governance (ESG) movement.
According to reports from Axios, Larry Fink will no longer use the term “ESG” because of the backlash it has generated from conservatives, who have labeled it “woke capitalism.” Fink claimed the term has become politically “weaponized” and is “ashamed” to be involved with debating the topic. Furthermore, Axios reported that “In a conversation at the Aspen Ideas Festival on Sunday, Fink acknowledged that Florida Gov. Ron DeSantis’ decision to pull $2 billion in assets hurt his firm in 2022.”
The American Tribune reported in late 2022 on the news that Florida would be freezing nearly $1.43 billion in long-term securities and $600 million in short-term investments that BlackRock managed. Florida was hitting back at the investment firm over its woke ESG standards, which some claim inject politics into finance.
Florida’s State Chief Financial Officer Jimmy Patronis stated, “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.
Other conservative states have taken similar actions to prevent ESG from influencing their state’s financial success. For example, West Virginia and Texas also took action to prevent state funds from being managed by BlackRock. West Virginia Treasurer Riley Moore slammed ESG, stating, “While the ‘Environmental, Social and Governance’ or ‘ESG’ movement might be politically popular in California or in New York, financial institutions need to understand their practices are hurting people across West Virginia.”
Moreover, last year Texas banned ten companies and 348 ESG funds from doing business with the state over ESG regulations which hurt energy companies, a large portion of the Texas economy. The banned companies include BlackRock, UBS, Credit Suisse, and hundreds of specific investment funds. Texas Republican Comptroller Glenn Hegar claimed companies who engage in ESG do not represent the interests of their shareholders.
“The environmental, social and corporate governance (ESG) movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Hegar said.
Red states taking this political initiative is a promising sign for localism. It will be interesting to see how they continue to combat other forms of woke politics.
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