BlackRock, the world’s largest money manager, is mounting a new defensive strategy amid fierce scrutiny by Republicans and accusations its CEO, Larry Fink, is pandering to “woke” climate and social values.
The Wall Street firm rolled out a new webpage Friday detailing its energy investment strategy that it branded as “setting the record straight,” rebutting claims from Republican-led states that it is boycotting fossil-fuel companies and prioritizing liberal climate policies over investors’ financial returns.
“The energy industry plays a crucial role in the economy, and, on behalf of our clients, BlackRock has invested $170 billion in U.S. public energy companies,” its new page reads. “Despite these investments, BlackRock has recently been accused of ‘boycotting’ oil and gas companies. We’re setting the record straight about our focus on energy investing, our responsibilities to clients and how we consider climate risk.”
The defense comes just months after BlackRock launched a new ad campaign about its investment strategies to combat conservative criticism. The right-leaning group Consumers’ Research also launched a multimillion-dollar ad campaign against BlackRock and Mr. Fink just weeks ago for having “weaponized” retirement funds by using its “clout to push a radical agenda.”
Several states, including Arkansas, Louisiana, Utah and West Virginia, have announced plans to collectively pull more than $1 billion of state funds out of BlackRock over its investment principles based on environmental, social and governance issues, or ESG. Texas has also taken action, placing the company on an “energy boycott” list that prevents public entities from doing business with it.
Republican officials from energy-rich states have charged BlackRock with making financial decisions that go against their states’ best economic interests by moving away from oil and natural gas companies in response to pressure from the left to back clean energy. As a result, Republicans have pulled state money, such as pension funds, from the firm.
While the divestment by red states is a drop in the bucket for BlackRock’s more than $8 trillion in client assets, the public rebuke from elected officials presents both public relations and political headaches.
BlackRock said its focus on climate risk is purely a financial one and not based on politics.
“Climate risk is one such trend given its implications for the economy. We believe that companies that better manage their exposure to climate risk and capitalize on opportunities will generate better long term financial outcomes,” its site reads. “Our consideration of the risks and opportunities of a transition to a low-carbon economy is in the interest of realizing the best long-term financial results for our clients and entirely consistent with our fiduciary duty.”
As evidence the company has not “boycotted” the energy industry, BlackRock cited the $170 billion it has invested on behalf of clients in U.S. energy companies, including pipelines and power generation facilities.
The company also vehemently rejected that it dictates how clients should invest and that it has “not made commitments or pledges to meet environmental standards that constrain our ability to invest our clients’ money.”
Further, BlackRock suggested Republicans who withdraw state funds in response to ESG principles — and thus limit investment options — were only hurting their constituents and retirees.
“Limiting Americans’ ability to choose their investments jeopardizes their ability to meet financial goals such as retirement,” BlackRock’s site says. “Open competition, the free flow of information, and freedom of opinions are core to the strength of U.S. capital markets.”