Larry Fink, CEO of BlackRock, made a surprising and confusing reversal during a recent earnings call with investors.
Fink appeared to state that decisions about investments should not be made about politics but only with regard to the best investment returns. Some statements could be perceived as criticizing people within his organization.
“Unfortunately, there are still others out there who put short-term politics, who continuously lie about these issues, they’re putting those issues above the long-term fiduciary responsibilities,” he said before adding, “As a fiduciary, politics should never outweigh performance.”
These sentiments appear to be at odds with his prior actions and statements. During Fink’s tenure, BlackRock has embraced an environmental, social, and governance (ESG) investment strategy that was supposed to move the company toward alternative forms of energy despite the relatively greater profitability of fossil fuels.
ESG is an approach to investing that regards the advancement of leftist social policies among the metrics for performance. Fink has previously publicly and proudly defended ESG in interviews with The New York Times.
BlackRock even weighed in on issues far outside profits or industry. The multinational corporation opposed voter ID laws and promoted DEI as part of its left-wing social efforts. This effort to politicize BlackRock toward a leftist orientation provoked a legislative response from numerous states who took issue with the company’s activism in their jurisdictions.
Florida’s chief financial officer was the first to take substantive action against BlackRock because of its ESG orientation, reportedly dropping over $2 billion in assets from the company. Similarly, Texas entities recently took action pursuant to a law passed in 2021, SB 13, that forbids policies that discriminate against Texas Oil and Gas producers. One of these entities was the state public school teachers’ pension, which dropped more than $500 million worth of investments with the company, per The Dallas Morning News.
Aside from his frustration with those who responded to BlackRock’s political moves, Fink also took aim at supposed ‘liars.’
“We have done a better job now of telling our story so that people can make decisions based on facts, not on lies, and not on misinformation or politicization by others,” Fink said.
Who are these liars? Fink did not elaborate.
It is possible he may have been referring to state officials in Texas, like State Comptroller Glenn Hegar, who first identified BlackRock as appearing to discriminate against Texas energy producers.
BlackRock vehemently denies that its Climate Action 100+ agenda discriminated against any Texas energy producer. The policy aggressively pivoted the company away from investments in fossil fuels, but that agenda was later heavily scaled back, as DX reported last month.
“We have never turned our back on Texas oil and gas companies,” BlackRock Vice Chair Mark McCombe told the Financial Times in 2022.
However, BlackRock is facing its own accusations of lying. According to McCombe, company officials were caught by surprise when the chairman of the State Board of Education announced that the Texas Public School Fund would discharge BlackRock from its duties as investment manager, depriving the company of $8.5 billion in assets. In a letter to the school board, McCombe claimed the company only learned of the termination of their relationship through a press release.
However, this information appears incompatible with records of official SBOE board meetings about a year before BlackRock was terminated, wherein officials raised concerns about BlackRock’s alleged discrimination against Texas oil and gas producers in its investment strategy, including in a meeting with the company, as previously reported by DX.
