Originally published June 26, 2023 11:30 am PDT
Larry Fink, the CEO of BlackRock, has publically expressed his discomfort with the ongoing political tug-of-war over ESG (environmental, social, and governance) factors in investment.
Fink’s concerns emerged amid a storm of conservative backlash, leading him to reconsider his use of the term “ESG,” which he says has been politically manipulated to an extent that leaves him feeling “ashamed.”
Moving forward, he disclosed his intent to avoid using the politically charged term.
“I’m not going to use the word ESG because it’s been misused by the far left and the far right,” he remarked.
However, that doesn’t mean Fink will stop promoting ESG ideology.
He suggested merely replacing the term with phrases related to specific issues like “decarbonization,” “governance,” and “social issues.”
There are all of the same focuses of ESG.
His recent pronouncement is poised to trigger a wave of discussions and debates.
Historically, BlackRock, which oversees $9.2 trillion in assets, has been a strong advocate for investing that takes into account ESG principles.
However, their pro-ESG stance has sparked criticism from conservative quarters, who dismiss it as “woke capitalism.”
This sentiment was echoed by certain states such as Florida and Texas, both of which have boycotted the company.
During a session at the Aspen Ideas Festival, Fink acknowledged the financial impact of Florida Governor Ron DeSantis’ decision to withdraw $2 billion from the firm in 2022.
However, he emphasized that 2022 was their most lucrative year, with U.S. clients contributing net flows amounting to $200 billion.
In an impassioned declaration, Fink said, “I’m ashamed of being part of this conversation.”
He clarified that his investment letters were not meant to be politicized.
Instead, they were intended to “identify longterm issues to our longterm investors.”
Despite his clear expression of shame, Fink later refuted his own statement.
“I never said I was ashamed,” he argued.
Further expressing his stance, he asserted, “I’m not ashamed. I do believe in conscientious capitalism.”
BlackRock is an official partner of the World Economic Forum (WEF).
