Suffice to say, it has not been a banner year for BlackRock CEO Larry Fink, who runs the world’s largest money management firm with more than $8 trillion in total assets.
First, there is the bad economic news: BlackRock’s stock price has declined by more than 20 percent, which means the company has lost about $1.7 trillion in 2022 alone.
While some of this can be attributed to macro-economic trends, it is also clearly apparent that BlackRock, which is all-in on environmental, social, and governance (ESG) investment metrics, erred in assuming that the United States was ready and willing to embrace the newfangled woke ESG investing scheme. Over the past few months, several states, and a handful of brave private corporations, have finally put their money where their mouth is, literally.
For example, Florida, Louisiana, North Carolina, South Carolina, Texas, and others have divested tens of billions from BlackRock due its relentless pursuit of supplanting shareholder capitalism with what it calls “stakeholder capitalism” via insidious ESG scores.
Most recently, North Carolina joined the anti-BlackRock, anti-ESG, anti-Fink chorus when its state treasurer, Dale Folwell, announced that Fink should “resign or be removed.”
In a scathing letter, Folwell wrote, “Unfortunately, Mr. Fink’s political agenda has gotten in the way of his same fiduciary duty. A focus on ESG is not a focus on returns, and potentially could force us to violate our own fiduciary duty of loyalty. Ultimately, Mr. Fink’s continued ideological pressure could result in using ESG scores against states and local governments, lowering their credit ratings and thus driving up their cost of borrowing at taxpayers’ expense. This not only concerns me as the state treasurer and ‘keeper of the public purse,’ but as Chair of the N.C. State Banking Commission and the Local Government Commission.”
Folwell added, “There is no blue money or red money at the treasurer’s office, only green. As the fiduciary for the North Carolina Retirement Systems, we seek not to be political, but mathematical. BlackRock needs to be totally focused on returns for their clients, not on the political effort to ‘transform’ the economy to their vision of carbon zero. Fossil fuels will be the engine that drives the world’s economy for the foreseeable future. The only way that I can see BlackRock refocusing on their fiduciary duty to their clients is for a change at the top.”
And then there is the mountain of bad press that has shadowed BlackRock all year. Once upon a time, BlackRock and Fink were the darlings of Wall Street due to their progressive policies and allegiance to all things woke. Nowadays, for many who cover business and politics, BlackRock has become an object of scorn.
Make no mistake, for many who cover business Fink remains King Midas. However, given his firm’s lousy track record this year, at least some are jumping off the BlackRock bandwagon. To counter some of the bad news, BlackRock recently announced a major management shake-up.
Although Fink will retain his title as CEO of BlackRock, it sure looks like things are in flux at BlackRock. For now, Fink seems secure in his position atop the BlackRock throne, however, how much longer this will last is anyone’s guess at this point.
PHOTO: Laurence D. Fink, Chairman and Chief Executive Officer, BlackRock, USA speaking during the Session “Saudi Arabia Vision 2030” at the Annual Meeting 2017 of the World Economic Forum in Davos. Photo by World Economic Forum. Attribution-NonCommercial-ShareAlike 2.0 Generic (CC BY-NC-SA 2.0).