BlackRock Gives Up On ESG
Mark Wiedman, head of the global client business at BlackRock, said, “Transition investing is specific and concrete. Clients know what we’re talking about. ESG as a category is a vague grab bag for many clients.”–WSJ
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That statement is not entirely true. BlackRock’s CEO Larry Fink was the godfather of ESG. In October 2022, Bloomberg reported, “BlackRock is a leader in this, and we are seeing the flows, and I continue to see this big shift in investor portfolios,” Fink said. He pushed ESG as hard as possible when it was seen as a magnate for assets. Or, as Fortune in 2022 reported, “BlackRock and Vanguard have a reputation for backing ESG initiatives.”
Larry Fink
Fink quickly retreats to the point where ESG is no longer part of BlackRock’s game plan.
What happened? Florida’s conservative politics did. Reuters wrote, “Florida’s chief financial officer said on Thursday his department would pull $2 billion worth of its assets managed by BlackRock, the biggest such divestment by a state opposed to the asset manager’s environmental, social and corporate governance (ESG) policies.” Flordia was not the only state to do so. Conservative state after state joined Florida’s approach and continued to pull money from BlackRock and other ESG funds. While the Florida sum was modest for BlackRock, an avalanche of such withdrawals would have drawn blood.
The WSJ article indicates that BlackRock is still a large investor in clean tech initiatives. However, ESG has been a significant investment movement over the last decade. Unwilling to be beaten up in public by conservative politicians, BlackRock walked.
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