BlackRock’s ESG saga has taken a new turn, with the boss of the giant asset manager now facing criticism for potential greenwashing and not ‘walking the walk’.
After several US states pulled funding due to it being too focussed on environmental, social and governance (ESG) investments, an activist investment firm has suggested the world’s largest funds group actually needs to do more.
Bluebell, a boutique London-based activist investment firm, has called on BlackRock Inc (NYSE:BLK) chief executive Larry Fink to step down, according to a letter reported by the Wall Street Journal, suggesting under his lead the firm has become inconsistent and was failing to live up to commitments on ESG.
Bluebell partners Giuseppe Bivona and Marco Taricco, who both previously worked at investement banks Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), wrote to Fink to say that he had “alienated clients and attracted an undesired level of negative publicity,” adding that BlackRock needed to carry out a strategic review of its stance on ESGs.
The letter expressed concern about Fink exposing Blackrock to “reputational risk” and “potentially fuelling a gap between the ‘talk’ and the ‘walk’ on ESG investing”.
BlackRock’s ESG policies have been targeted from all angles, with over US$3bn of US funding removed from its management this year in a rejection by many on the political right of “woke ideology,” including most recently by Florida’s financial chief Jimmy Patronis.
Patronis last week suggested: “Using Florida’s cash to fund BlackRock’s social-engineering project isn’t something we signed up for,” as he outlined the state would completely divest from the asset manager by early 2023.
With both Louisiana and Missouri also removing funds from BlackRock’s control, Fink has moved to defend his firm, arguing: “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ’woke’.”
Read: Former BlackRock executive warns of 'broken ESG investment model'