CEO Larry Fink of investing titan BlackRock put reduced emphasis on climate and other environmental, social and governance (ESG) goals in an annual letter to the company’s investors and stakeholders Wednesday, amid Republican criticism of his firm’s investing strategy.
BlackRock has faced significant criticism from Republicans, who allege that the company has focused too much on “woke” investing to the detriment of its clients, and more recently Democrats who argue the company hasn’t gone far enough with its ESG efforts. Fink’s reduced emphasis on his firm’s role in the energy transition stands in stark contrast to his 2020 letter to investors, in which he argued the company had a “significant responsibility … to play a constructive role” in the transition to low-carbon sources of energy, Axios reported.
“At BlackRock we use data and analytics to help our clients understand how the energy transition is evolving and give them choices about how they would like to invest in emerging opportunities. Better data is essential,” Fink said in the letter. “But 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.”
While Fink did not respond directly to the firm’s critics, he emphasized that BlackRock’s “fiduciary duty” to clients, which he said included an understanding that “climate risk is an investment risk.” Fink echoed the company’s previous messaging that it would not alter its investment strategy due to political pressure.
“There are many people with opinions about how we should manage our clients’ money,” said Fink. “But the money doesn’t belong to these people. It’s not ours either. It belongs to our clients, and our responsibility and our duty is to them.”
BlackRock managed $8.6 trillion as of Dec. 31, according to Reuters.
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