When you're BlackRock, a titan with stakes in hundreds of companies worldwide, you're open to criticism from several fronts.
Since the financial crisis of 2008, BlackRock, like other flagships of Wall Street, has found itself targeted by critics of finance and globalization, on the left and the right.
These critics call the firms the faces of greed and symbols of the elites wanting to impose their globalist agenda. BlackRock (BLK) has heard it all.
Yet for all the power and influence it wields, the firm has not fallen into the trap of perceiving itself to be above everything, even the law.
And rarely did BlackRock and its illustrious chief executive, Larry Fink, respond to its critics, preferring to ignore the noise and focus on their mission: managing the money of millions of police officers, teachers, nurses, firefighters and other workers.
BlackRock Under Attack in the Culture War
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 summarized by the shorthand ESG, or environment, social and corporate governance policy.
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.
BlackRock Settles the Score
As the campaign for the presidency gets under way, the more the culture war intensifies, the more the attacks against BlackRock and Fink have multiplied.
But this time the Wall Street titan seems determined to respond, especially when the accusations are unfounded, unverified or taken out of context.
That's what just happened: This month right-wing Twitter accounts have been circulating an old video of Fink explaining how to push for change in the corporate world.
"It's just you have to force behaviors," Fink said in November 2017 at the New York Times DealBook conference. "And if you don't force behaviors, whether it's gender or race, or just any way you want to say the composition of your team, you're going to be impacted and that's just not recruiting."
For conservatives and right-wing activists, these remarks are proof that BlackRock wants to implement a political agenda in the companies in which it invests. The outline of this hidden agenda is "gender, pride and woke diversity."
"'We have to force change' Excuse me what? Is @BlackRock/ money behind all the gender, pride and woke diversity thing?," said one Twitter user on June 5.
"BlackRock really enjoys forcing people to be woke. American capitalism is under attack like never before. We must cancel ESG before it completely cancels us," said another Twitter user.
"It's all a conspiracy, they said. No one is trying to socially engineer corporate America, they said," the conservative activist Charlie Kirk added.
BlackRock reacted promptly, determined not to leave the field to its detractors.
"A nearly six-year-old clip misconstruing Larry Fink’s words about BlackRock’s own approach to its employees has been circulating for years on social media and is often taken out of context," the company said on Twitter on June 6.
"As a fiduciary, our actions serve one purpose: maximizing long-term financial value for our clients. As an employer, we seek to hire employees from a wide range of backgrounds and perspectives because we believe this diversity is critical to delivering for our clients."
This scathing response from BlackRock comes as boycott campaigns are launched against brands and companies announcing initiatives to support the LGBTQ+ community. Bud Light and Target have paid the price for these campaigns in recent weeks in the middle of Pride Month.
