BlackRock pushes back amid anti-ESG narrative

Earlier this week Louisiana announced that it would pull assets from funds

BlackRock is trying to gain some sense of control over the recent anti-ESG rhetoric that has started costing it business, today launching a webpage to counter the attacks.

That page, entitled ‘Energy investing: Setting the record straight’, comes just after news that the world’s largest asset manager is losing nearly $800m in fund investments with the State of Louisiana. That announcement from state Treasurer John Schroder on Wednesday was the latest in a chain of very public rallying cries from conservatives against the concept of sustainable investing.

In a letter, Schroder acknowledged that BlackRock does in fact invest in the oil and gas business, but said he did not like CEO Larry Fink’s stated position on ESG matters.

“I’m convinced that ESG investing is more than bad business; it’s a threat to our founding principles: democracy, economic freedom, and individual liberty,” Schroder said. “It threatens our democracy, bypasses the ballot box and allows large investment firms to push political agendas.”

No one is happy

Louisiana’s public campaign away from BlackRock follows others from conservative-majority states, most notably Texas and Florida. But the asset manager is also catching flak from progressives, for the opposite reason: not doing enough around climate change.

Last month, New York City Comptroller Brad Lander sent a letter to the company expressing concerns that its investment activities fall seriously short of its climate commitments.

“The fundamental contradiction between BlackRock’s statements and actions is alarming,” Lander said, noting the company’s responses to the conservative states. “BlackRock cannot simultaneously declare that climate risk is a systemic financial risk and argue that BlackRock has no role in mitigating the risks that climate change poses to its investments by supporting decarbonization in the real economy.”

Lander asked the company to publish a plan to clarify net-zero goals across its entire portfolio, among other requests.

The response

BlackRock has responded to the scorn from Republican state leaders in several ways, including open letters, with the most recent effort being the webpage on its site for individual investors.

“The energy industry plays a crucial role in the economy, and, on behalf of our clients, BlackRock has invested $170bn in US public energy companies,” the company states on that site.

“We are also partnering with energy companies and start-ups to fund new technology and innovations that will power the global economy, now and in the future. Despite these investments, BlackRock has recently been accused of ‘boycotting’ oil and gas companies.”

As with its prior statements, the company emphasized that it aims to provide its clients with a range of choices in how they invest. The company has also noted that it allows fund shareholders to opt to vote on their own on shareholder resolutions.

“We do not dictate particular investment strategies,” the company said. “Our focus on climate risk and energy is about driving financial outcomes for clients. One of the most critical tasks of an asset manager is to provide clients with insights on short- and long-term trends in the global economy that can impact their portfolios. We do this across all sectors – from healthcare to technology to energy.”

Climate risk has economic implications, and addressing it could lead to stronger performance over time for investors, the company wrote.