BlackRock CEO Larry Fink, a leading proponent of climate-conscious investing known as ESG, is retreating from the use of the term — but not the financial strategy.
The leader of the behemoth investment firm, with more than $9 trillion in assets under management, blamed political extremes on both sides of the aisle for twisting the meaning of ESG, or environment, social and corporate governance investing.
“I’m ashamed of being part of this conversation,” Mr. Fink said Sunday at the Aspen Ideas Festival in Colorado, according to Axios.
He went on to say: “I’m not going to use the word ESG because it’s been misused by the far left and the far right.”
At another point in the wide-ranging conversation, Mr. Fink claimed he never said he was ashamed.
“I never said I was ashamed,” Mr. Fink said. “I’m not ashamed. I do believe in conscientious capitalism.”
Mr. Fink’s comments represented a modest retreat against the hot-button term that has become synonymous among conservatives with “woke capitalism.” The investment strategy promotes clean energy and takes into consideration climate change and social justice politics, a practice that Republicans oppose citing diminished financial returns for investors and decreased fossil fuel production.
But while casting aside the term “ESG,” Mr. Fink did not say he intends to abandon the strategy that in 2022 alone cost his firm more than $4 billion from Republican-led states divesting public funds, mostly in the form of pensions.
He also tamped down the ESG rhetoric in his annual letter to investors earlier this year.
“When I write these [investment] letters, it was never meant to be a political statement,” Mr. Fink said. “They were written to identify long-term issues to our long-term investors.”
BlackRock has pushed back against conservatism criticism that the firm boycotts fossil fuels by touting its more than $200 billion invested on behalf of clients in oil and natural gas. But such investments have drawn jeers from the left.
BlackRock’s board of directors earlier this year voted down two climate-related proposals from shareholders that would have required more detailed environmental financial reports.
Democrats and pro-ESG financial institutions, such as Wells Fargo, State Street and JPMorgan, have struggled to counter Republicans’ anti-ESG campaigns at the state and federal levels. House Democrats created the pro-ESG Sustainable Investment Caucus to counter the opponents.
The caucus’ co-chair, Illinois Democratic Rep. Sean Casten, on Monday criticized House Republicans’ plans to hold future hearings “bashing ESG investing.” He tweeted a news story about automaker Hyundai raising its electric vehicle sales goal along with the caption: “Meanwhile, people who actually deploy capital … keep investing in clean.”
• Ramsey Touchberry can be reached at rtouchberry@washingtontimes.com.
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