BlackRock held its annual shareholder’s meeting Wednesday, and CFACT, which owns stock in the company, sent a representative to voice concern over the company’s longstanding support of Environmental, Social, and Governance (ESG) criteria.
Collegians National Field Director Greg Neff took advantage of the meeting’s Q&A period to ask the company’s CEO, Larry Fink, the following: “On page 42 of your 2023 Annual Report, Blackrock says its goal is to ‘be the global leader in sustainable investing.’ However, Barrons reported that in 2023, investors pulled more than $13 billion from US sustainable funds, and BlackRock saw a 12% reduction in gains compared to 2021 in this area. Is seeking to become a global leader via a sinking investment strategy that’s on a downward trend a wise idea?”
Mr. Fink quickly responded, “BlackRock’s long-steady model providing investment choice helps clients build portfolios in line with their unique preferences and their unique goals. For some clients, this includes investing in sustainable strategies. BlackRock manages over $800 billion of dedicated, sustainable AUM on behalf of clients. That’s up from $200 billion three years ago. We continue to see demand, particularly in Europe and private markets, especially as we expect to see large pools of capital opening in transition finance. For example, last year, we announced our carbon capture joint venture with Occidental Petroleum, which will be the largest director capture facility upon completion, and it’s in Texas. Our role is to serve as a fiduciary for our clients. That’s why we offer more choices than anyone else in the industry. As a result of our choice our clients have made, we are the largest investor in both hydrocarbons and renewables.”
The company argues that there is demand and that they are offering their clients choices, but is this so? As the question stated, there has been a major pullback from investors in the area of “sustainable investing,” so why is Mr. Fink, in essence, saying the opposite? Is it because of the corporate culture, which is wedded to ESG and woke investing?
Vivek Ramaswamy, in his quintessential work “Capitalist Punishment”, notes how BlackRock uses their proxy voting abilities to push a green agenda regardless of whether or not the clients are requesting sustainable funds. In a lawsuit detailed in Ramaswamy’s book, he quotes a Blackrock representative under oath saying, “We actually integrate ESG… regardless of whether that portfolio has an ESG objective or not.” This history in BlackRock’s dark past makes Mr. Fink’s proclamation that the company’s investing decisions are driven by “client choices” and not political/ideological priorities somewhat suspect.
In addition to getting the opportunity to question Blackrock’s Board of Directors, CFACT also used this meeting to vote in favor of a proposal from the National Center for Public Policy Research, which demanded a report be made public demonstrating the company’s issues with viewpoint discrimination. While this proposal did not pass, it nevertheless showed the Board that stockholders were paying attention to such problems within the organization.
CFACT will continue attending shareholder meetings throughout the coming weeks and will report back on the progress being made.