BlackRock CEO Larry Fink suggested that the political backlash facing the firm over climate and ESG issues has not significantly impacted the company, with inflows outpacing ESG-related outflows by around 100 times over the past year.
Asked about the impact of the anti-ESG political movement in a Bloomberg TV interview at the World Economic Forum in Davos, Fink said:
“We lost about $4 billion of flows from various states, but in long-term flows last year we were awarded $400 billion. Just last year in the United States our clients entrusted us with an additional $230 billion. So you tell me.”
BlackRock, as the largest global investment management company, and a leading voice in the investment community on climate change and energy transition-related investment themes, has found itself at the center of a vocal anti-ESG movement by Republican politicians in the U.S., who have accused the firm of following a social agenda, or of “boycotting” and working to harm energy companies.
The U.S. anti-ESG push has seen Florida pull $2 billion in assets from BlackRock’s management, placed on a list of ESG-supporting asset managers subject to potential divestment by Texas, and subject to accusations of “boycotting” energy companies by 19 state Attorneys General. In a hearing last month, a representative of the company was questioned by Republican lawmakers on the Texas Senate Committee on State Affairs who claimed that support for ESG was part of “pushing a narrow political agenda.”
In the interview, Fink said that he is trying to address the misconceptions that have been raised about ESG and climate-related investing, noting the importance of the issues to investment decisions, particularly in light of recent announcements like the ”game-changer” Inflation Reduction Act, and said that investors other jurisdictions view these issues as central to their investment choice, adding:
“If you do not have a lens towards decarbonization, you’re not going to win one euro of business.”
Despite the backlash, BlackRock indicated in December that it will continue to ask companies to disclose their climate-related strategies and emissions reduction targets with the release of its 2023 Investment Stewardship Global Principles.
Fink also addressed the claim that BlackRock boycotts energy companies during the interview, pointing out that the firm is actually one of the world’s largest hydrocarbon investors, and indicating that the firm is actively working with major energy companies on their pathway to decarbonization.
“We actually won the entire pension plan of a major hydrocarbon company.
“If we were the enemy that we’re being accused of, I don’t think we’d have those types of relationships.”