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Larry Fink Rebukes Political Critics, Calling Them Out For 'Continuously Lying' About The World's Largest Money Manager

Larry Fink Rebukes Political Critics, Calling Them Out For 'Continuously Lying' About The World's Largest Money Manager
Larry Fink Rebukes Political Critics, Calling Them Out For 'Continuously Lying' About The World's Largest Money Manager

BlackRock Inc. CEO Larry Fink called out political critics for their continuous lies about anti-woke investment and BlackRock, the world's largest money manager.

Fink's troubles began in 2023 when the Select Committee on the Chinese Communist Party of the U.S. House of Representatives launched an investigation into BlackRock's investments with certain Chinese companies. The committee was concerned that BlackRock was among the 40 companies flagged for investing in blacklisted Chinese businesses.

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In a letter to Fink, the committee said Americans are funding the development of weapons for the People's Liberation Army (PLA).

That wasn't the only backlash BlackRock faced from political critics. Republicans have been pushing back against investment managers for being "too woke." BlackRock is known as a leading voice in climate change and environmental, social and governance (ESG) initiatives. In 2020, Fink promised that BlackRock would focus on a sustainability-driven investment approach, which was met with anti-ESG pushback from conservative politicians who felt the policies pushed a narrow political agenda.

During a first-quarter earnings call, Fink called out the anti-ESG politicians for their continuous lies about BlackRock, saying, "We have done a better job now of telling our story so that people can make decisions based on facts, not on lies and not on misinformation or politicization by others. Unfortunately, there’s still others out there ... who continuously lie about these issues."

Republicans at the state level publicly condemned this type of investing. Florida, Kansas and Idaho, historically Republican states, have banned or limited ESG.

"An investment manager has a fiduciary duty to consider that risk," Gregory Hershman, head of U.S. policy for Principles of Responsible Investment (PRI), told Forbes.

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House Judiciary Committee Chairman Jim Jordan led an investigation into BlackRock's ESG investing practices. The committee subpoenaed BlackRock for apparently supporting and adopting left-wing ESG goals. West Virginia was the first red state to boycott BlackRock, with Treasurer Riley Moore pulling state money out of the company. By the end of 2022, numerous red states announced they plan to pull $3 billion out of BlackRock.

The Texas Permanent School Fund Corp. terminated its $8.5 billion contract with BlackRock, claiming the investment company was boycotting fossil fuel energy producers. The blow came as Fink had been in productive discussions with the Texas government on infrastructure issues.

Texas State Board of Education Chair Aaron Kinsey said that any relationship with BlackRock would breach state law that prevents investing in a company accused of boycotting energy companies.

BlackRock denied the claim and said it invested more than $300 billion in various energy firms. In 2023, BlackRock invested $550 million in a carbon capture project in Texas, among the biggest of its kind in the world.

Florida announced it would pull $2 billion of assets from BlackRock and passed a resolution that no longer allows fund managers to allow ESG considerations.

How has this public backlash against ESG policies affected BlackRock?

Fink said threats against BlackRock are not working and that there has been an increase in U.S. investments in BlackRock. U.S. investors have poured $1.9 trillion into BlackRock over the last five years, including $300 billion in 2034, Fink said.

BlackRock also saw revenue grow 11% during the first quarter. Its assets under management increased from $1.4 trillion to a record $10.47 trillion in the first quarter. To put this into perspective, first-quarter net inflows were $76 billion compared to $183 billion in 2023.

The growth demonstrates that despite pushback from anti-ESG politicians, people still choose BlackRock with their investments.

"We started 2024 with great momentum and I strongly believe that there are more opportunities ahead for BlackRock, more than any other time before," Fink said.

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