BlackRock’s Larry Fink ditches ‘ESG’ term due to backlash.

BlackRock CEO Larry Fink Takes a Stand Against the Politicization of ESG

During the Aspen Ideas Festival, BlackRock CEO Larry Fink made a bold statement, declaring his intention to stop using the term “ESG” due to the politically charged environment surrounding it. Fink, who has faced criticism from both the Right and the Left for his firm’s embrace of environmental, social, and governance principles, expressed his frustration with being at the center of the ESG debate.

“I’m ashamed of being part of this conversation,” Fink admitted.

However, when pressed about his comment later in the event, Fink clarified that he never said he was ashamed. He emphasized his belief in conscientious capitalism and expressed his concern that the concept of ESG has been “weaponized” by extremists on both ends of the political spectrum.

“I’m not going to use the word ‘ESG’ because it’s been misused by the far Left and the far Right,” Fink stated.

Despite distancing himself from the term, Fink assured the audience that he is not abandoning the underlying principles of ESG. This shift in stance is significant considering BlackRock’s close association with the ESG movement and the subsequent backlash from Republicans.

In his annual investment letter, Fink has consistently addressed important issues, making it a must-read for executives and business leaders. In 2020, he focused on climate change, stating that it was becoming a “defining factor” in BlackRock’s assessment of companies. This shift in focus influenced other companies to integrate climate considerations into their business models.

Interestingly, Fink’s recent investment letter did not mention ESG and downplayed the discussion of climate change. He emphasized that companies should not be solely responsible for environmental issues, signaling a change in tone as GOP pushback grows.

“When I write these [investment] letters, it was never meant to be a political statement… They were written to identify long-term issues to our long-term investors,” Fink clarified.

BlackRock’s support for ESG has not only attracted rhetoric but has also impacted the firm financially. Several Republican-led states, including Florida, South Carolina, Utah, Arkansas, Missouri, and Louisiana, have divested or announced plans to divest hundreds of millions of dollars from BlackRock due to its stance on ESG.

Despite these divestments, Fink proudly highlighted that last year was the best in BlackRock’s history, with net flows of $200 billion from U.S. clients. However, critics like Will Hild, the executive director of the conservative group Consumers’ Research, continue to challenge BlackRock’s ESG agenda.

“Ignore his hollow backtracking. He and his ESG cronies (like [Bank of America] CEO Brian Moynihan) are intent on ‘forcing’ their far-left agenda onto the American people, and their main tool is ESG,” Hild tweeted.

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