BlackRock CEO "walks tightrope" on climate risk investing

[Peter1469]

Blackrock is the world's largest asset manager. But more importantly, they are the largest manager of retirement type funds in the US, largely pension, where underperforming ESG goals harm retirees who don't have a say in their investments.

I don't care if individuals choose to invest in underperforming funds to make themselves feel better over ESG funds. I do care when it is mandatory. Or if ESG is added to the fiduciary rules.

BlackRock CEO "walks tightrope" on climate risk investing

This year’s chairman’s letter from BlackRock CEO Larry Fink, published Wednesday, gives less emphasis to climate risk and environmental, social and governance (ESG) investments than past letters — but doesn't play down the substance.


Why it matters: As the head of the world's largest asset manager, Fink’s letters are widely taken as a signal for how the financial community is thinking about certain topics, and how policy makers may need to respond.


Driving the news: His latest letter departs from those of the past several years, which focused largely on the need to incorporate climate risk, ESG concerns and broader corporate responsibility issues into how business should be conducted.

• BlackRock is a top target of right-wing interest groups and Republican lawmakers, who have accused the firm — and specifically Fink — of pushing a so-called “woke” investing trend that does not serve investors' interests.
• Recently, several states have moved to pull money out of BlackRock funds, alleging the firm boycotts fossil fuels, which the company rebuts again in the new letter by touting its natural gas investments.

Between the lines: Fink’s latest dispatch deemphasizes ESG investing — increasingly a politically fraught topic — compared to his most recent annual letters. In fact, the term ESG does not appear anywhere in the letter.

• The energy transition concerns are not raised until paragraph 18, and the word “climate” doesn’t appear until the eighth page of the lengthy letter. Even when it does, climate is only used five times.

Zoom in: Still, the letter indicates the company is not backing away from climate concerns.

• "For years now, we have viewed climate risk as an investment risk. That’s still the case," the letter states.
• Fink discusses the investment opportunities associated with the energy transition, potential financial repercussions from climate change-related extreme weather events and the need for companies BlackRock invests in to disclose their climate change-related risks.
• Fink positions BlackRock as offering choices to clients. He also makes clear the firm does not direct companies it invests in to take certain actions on climate change or other issues, with a more hands off approach to proxy voting than in years past.

Yes, but: Fink's statement that asset managers including BlackRock should not set policy or "be the environmental police" contrasts with his 2020 letter to investors.

• That letter stated: "BlackRock does not see itself as a passive observer in the low-carbon transition. We believe we have a significant responsibility — as a provider of index funds, as a fiduciary, and as a member of society — to play a constructive role in the transition."

The intrigue: Environmental groups cautioned against Fink's messaging on consumer choice in particular.

• “Despite what BlackRock may say, the company appears to be giving ground to those who are trying to undermine the finance sector’s role in addressing the climate crisis,” said Cleo Rank, a sustainable finance analyst at InfluenceMap, a lobbying watchdog group.

What they’re saying: “[BlackRock is] the 800 pound gorilla here and they're definitely walking a tightrope,” Daniel Firger, managing director of Great Circle Capital Advisors, a climate finance consultancy, told Axios in an interview.

• “It's heartening to see the world's largest asset manager not walk back from its very clear fiduciary mandate to think about climate related risks,” he said.

[carolina73]

And should anyone believe a word that Larry Fink says?

[texan]

And should anyone believe a word that Larry Fink says?

Why would you make this comment?

[texan]

Interesting read Peter. Do you believe he is changing his stance to appease both sides because of lost busness?

[Just AnotherPerson]

Anything Larry says is by design to move society in a desired direction.

[testsubjectalpha]

And Joe "Bozo" Biden today vetoed a bill passed by the House and Senate to exclude ESG cajoling, or creating perverse incentives, by our GOVT, out of investment decisions. After reading the OP here, just let that sink in for a minute.

Do you know where Blackrock, or any other firm, is investing your retirement money? Except for a small few here, I highly doubt it.

[Peter1469]

Interesting read Peter. Do you believe he is changing his stance to appease both sides because of lost busness?

Poor performance of ESG focused companies. Its is the $$.

I suspect he only got on the Green Cult's side because he thought it would be a money maker.

[Peter1469]

And Joe "Bozo" Biden today vetoed a bill passed by the House and Senate to exclude ESG cajoling, or creating perverse incentives, by our GOVT, out of investment decisions. After reading the OP here, just let that sink in for a minute.

Do you know where Blackrock, or any other firm, is investing your retirement money? Except for a small few here, I highly doubt it.

With many retirement funds you can control that to a great degree by either doing it yourself, which I do not advise most people to do, or hiring a financial advisor who understands what the fiduciary duties actually entail.

The big losers here are pension holders. And 401Ks.

[Peter1469]

An Open Letter to BlackRock Investors | RealClearMarkets

Larry Fink finally got around to a 2023 annual letter. In it he spends more than 9,000 words to confuse the picture about what’s really on tap for 2023: He knows he’s doing you wrong, violating his fiduciary duties to you. And he’s going to keep it right up.



This was the first year that Fink’s grandiose annual letter was sent to investors; in recent years it had been sent to CEOs. Fink sweeps this under the rug as no big deal, but it serves as a covert admission that Fink and his minions are aware of the dangers those CEO letters created for BlackRock and for Fink himself.


Last year, Fink exulted in his CEO letter that one of his marching orders to American corporations (made in your name, investors) was to speed up their “equity” efforts. Given that equity means illegal discrimination to make up for past illegal discrimination, Fink’s instructions (unless he had – but failed to disclose – some unique definition of equity, which wouldn’t provide him much of a defense) boiled down to a demand that companies BlackRock invests in deny some Americans their civil rights. Conspiring with others to do that is a federal crime. The CEO letter last year rather makes Fink look like a crime boss.


And so this year Fink has shifted the target of his letter to you investors, and was careful not to mention equity. You can bet your bottom dollar, though, that Fink has no intention of ending his campaign. His letter contained nothing to suggest that he’d backed off of equity demands, nor even a definition of equity that might provide some fig leaf of a claim that he’s been using some special definition that doesn’t violate civil rights. And BlackRock was given the opportunity this year (note: by the Free Enterprise Program I direct) to conduct a review to determine if its in-house equity programs violate the civil rights of any employees, but it both declined to do so and will oppose the attempt to have shareholders endorse such a review at its annual meeting this spring.


Fink tries to create a fog through which he can imply that he’s not using all of the assets entrusted to BlackRock to push his personal policy preferences. But here, too, close reading of his letter establishes that nothing will change. Fink facially recognizes his fiduciary duty, sort of, writing that BlackRock “serve[s] each and every client by seeking the best risk-adjusted returns within the investment guidelines they set for us.” Later he asserts that “[a]s minority shareholders it’s not our place to be telling companies what to do.”


This sounds like a huge admission from the guy who bragged about “forcing behaviors” on companies to bend them to his personal preferences about decarbonization and equity-discrimination. But with the next sentence Fink makes clear that all his assertions are smoke, and that nothing will change. “My letters to CEOs [were] written with a single goal: to ensure companies are going to generate durable, long-term investment returns for our clients.” Tie that to his assertion that “it’s critical for CEOs to use their voice in the world – and there’s never been a more crucial time for me to use mine. I will do so whenever and wherever I believe it can serve the interests of our clients and the firm,” and it becomes clear that all of this year’s talk about respecting individual investor preferences and not telling companies what to do is just guff. He’s still going to “force behaviors” by speaking out about his personal policy preferences in ways that give target-company CEOs their marching orders while maintaining a gauzy pretext that everything he personally likes serves investors’ pecuniary self-interest.


After all, despite talk of respecting the “guidelines [investors] set for us,” Fink doesn’t do that at all. At last year’s shareholder meeting he noted that BlackRock offers ESG and non-ESG funds, but then he and his colleagues affirmed that BlackRock uses all of its assets (down $1.7 trillion from that meeting, but somehow that doesn’t call any of his strategies into question), not just the ESG-denominated ones, to push companies to bow to the twin ESG pillars of equity and political decarbonization.


He illustrates the same sleight of hand again in this year’s letter, paying formal obeisance to giving investors options but then considering the interests and concerns of only those investors who agree with his personal policy preferences. In justifying his still being all in on political-schedule decarbonization he notes that “[t]he transition to a low-carbon economy is top of mind for many of our clients,” and then shares as fact a series of climate-alarmist propaganda notes, such as his blithe assertion that “[t]here’s more flooding, more wildfires, and more intense storms.”

[The Sage of Main Street]

Poor performance of ESG focused companies. Its is the $$.

I suspect he only got on the Green Cult's side because he thought it would be a money maker.

Green Is the Color of Daddy's Money



Environmentalism is a weapon of our hereditary upper class, because the class mobility created by uninhibited development of nature's immense untapped resources would threaten the enormous distance between them and the plebeians. The corporate plutocrats care more about the college-brainwashed opinions of their sons and daughters than about clients and employees.

As for the racial part of ESG, Whites who are born rich deplore, despise, hate, and fear all other White people. They also superstitiously believe that, because of their privileged birth, they have evolved into a separate and superior race, born to rule over all others. These brats have an enormous influence over their parents, who make all our laws and have absolute control over the present degenerate American culture and programmed thought.