BlackRock, the world's largest asset manager, is used to being the target of criticism, even revulsion.
Since the financial crisis of 2008, the firm, like other flagships of Wall Street, has found itself the target of critics of finance and globalization on the left and on the right.
The critics are relentless with their name-calling: face of financial greed, symbol of the elites wanting to impose their globalist agenda. BlackRock has heard it all.
Rarely did BlackRock and its illustrious chief executive, Larry Fink, respond, preferring to ignore the noise and focus on their mission: managing the money of millions of police officers, teachers, nurses, firefighters and all other workers.
But in recent years the firm has found itself at the center of a new culture war: the one between traditional values and change. This is symbolized by the shorthand ESG, or environment, social and corporate governance.
On ESG, BlackRock Is Caught in the Middle
Behind this abbreviation, resentment and criticism between the left and the right have crystallized for several years.
Under pressure from progressives and liberals, ESG has become a watchword in the business world. According to its defenders, it corresponds to responsible investment.
Anxious to address the issues that newer generations deem important, BlackRock, a shareholder in many companies worldwide, has adopted ESG and encourages the companies in which it invests to think beyond profits.
"As stewards of our clients’ capital, we ask businesses to demonstrate how they’re going to deliver on their responsibility to shareholders, including through sound environmental, social, and governance practices and policies," Fink wrote in his 2022 annual letter to CEOs.
The environmental factor indicates whether a company pollutes or implements sustainable practices. The social factor takes into account how the company works with its staff, customers, suppliers and the wider community, and the impact it has on them.
Finally, the governance factor relates to the management of the company, its internal controls and audits, the oversight of governance by the board, and the compensation provided to senior management.
The big problem is that BlackRock has become the target of both ESG opponents and ESG proponents, who respectively feel the firm is going too far or isn't going far enough. These criticisms have become vicious.
Elon Musk, CEO of electric-vehicle maker Tesla (TSLA), is one of the anti-ESG voices. He just launched a new charge against ESG while the World Economic Forum is under way. Participants at the Davos, Switzerland, forum are debating the climate emergency.
"The S in ESG stands for Satanic," the billionaire blasted on January 15.
'Attacks Are Now Personal': BlackRock's Fink
All these attacks affect Fink, who feels that they have become personal.
"I'm taking this very seriously," he told Bloomberg TV at the WEF. "We are trying to address the misconceptions. It's hard because it's not business anymore; they're doing it in a personal way. And for the first time in my professional career, attacks are now personal. They're trying to demonize the issues."
"Let’s be clear: The narrative is ugly; the narrative is creating this huge polarization,” Fink added. "If you really read the CEO letters that I’ve written in the past, I talk about a transition.”
In these letters, in which he touts "stakeholder capitalism," Fink urges bosses not to focus solely on profits and to do what's right for society.
Conservatives thus see in these words a capitulation to progressive woke ideology. As a result, Texas and Florida have already threatened to considerably reduce their business with BlackRock.
Faced with this rejection, BlackRock last June went on the offensive to defend its ESG approach in an advertising campaign.
"This initiative will be a sustained effort over the coming weeks and months aimed at telling our story to a broader audience to help them understand what BlackRock does,” Dalia Blass, global head of external affairs, and co-Chief Marketing Officer Alex Craddock said at the time.
"We are doing everything we can to change the narrative,” Fink told Bloomberg TV.
Fink now wants to focus on hope.
"BlackRock is a firm that tries to sell hope because why would anybody put something into a 30-year obligation unless you believe something is better in 30 years?”
