BlackRock CEO Larry Fink admitted in a 2023 annual letter to investors that oil and gas are “vital” to global energy demand—a shift from his earlier stance promoting a climate change agenda which focused on progressive values that denounce fossil-based fuels.
Fink’s admission that fossil fuels are “vital” to the economy is a marked change from the past years when the CEO aggressively promoted energy transition.
Fink also talked about BlackRock “exiting investments that present a high sustainability-related risk, such as thermal coal producers” and “launching new investment products that screen fossil fuels” in the 2020 letter.
However, BlackRock has suffered losses in recent times, putting the company under pressure. Between 2021 and 2022, BlackRock’s revenues fell from $19.37 billion to $17.87 billion. Its assets under management fell from $10.01 trillion to $8.59 trillion.
Engineering ESG Change
In the recent investor letter, Fink stated that many of the institution’s clients seek BlackRock’s help to determine the “future paths of carbon emission” to make investment decisions, including on government policies.Fink stressed in the letter that it is not the role of an asset manager like Blackrock to “engineer a particular outcome in the economy.”
“As I have said consistently over many years now, it is for governments to make policy and enact legislation, and not for companies, including asset managers, to be the environmental police.”
The letter points out that BlackRock held more than 2,300 company engagements on climate and took voting action against 53 firms for climate issues while putting 191 businesses under watch.
BlackRock has been a prominent member of the Glasgow Financial Alliance for Net Zero (GFANZ) which is pushing for a “systemic change” aimed at altering the planet’s “climate trajectory” by bringing together “over 450 leading financial enterprises united by a commitment to accelerate the decarbonization of the global economy,” said the state attorneys general.
The investment firm had also committed to ensuring that all assets under its management achieve net-zero emissions by 2050 or sooner, said the letter. “BlackRock’s belief that the world will require net zero by 2050 could be a pretext to force companies to adopt your preferred climate policies.”
State Action
States have taken action against BlackRock for pursuing ESG policies. In October, Louisiana informed the company that the state will be liquidating all its investments with the firm. “Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy,” Treasurer John Schroder wrote in a letter to Fink.In December 2022, Florida announced that its treasury will start divesting $2 billion worth of assets managed by BlackRock.
“If Larry or his friends on Wall Street want to change the world—run for office. Start a nonprofit. Donate to the causes you care about. Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for.”