BlackRock CEO Larry Fink says he will no longer use environment, social, and governance (ESG) terminology, following the phrase’s politicization.
- Speaking on Sunday at the Aspen Ideas Festival, Fink discussed the ongoing battle with the state of Florida and Governor Ron DeSantis over the issue of ESG.
- BlackRock, which manages $9.2 trillion in assets, remains bullish on responsible investing with respect to issues like climate change but will no longer use the controversial terminology.
- Fink states that he is ashamed to be dragged into a political debate where the terminology has been “weaponized,” with major Republican politicians blasting BlackRock for pushing “woke capitalism,”Axios reports.
Why It’s Important
ESG has become one of the most hotly debated political issues in the 2024 presidential election. Ron DeSantis had used it as a wedge issue in his larger campaign against “wokeness,” becoming the second most popular Republican candidate in the field due to his aggressive tactics against sizable progressive-leaning companies like Disney and BlackRock.
President Joe Biden used the first veto of his administration to strike down a bi-partisan anti-ESG bill that would have restricted American businesses’ ability to invest in ESG indexes. Other investment firms, such as Vanguard, have taken stances against the viability of ESG investing. Tesla CEO Elon Musk has dismissed ESG as “the devil.”
Fink has no intention of backing away from social responsibility. He still believes in “conscientious capitalism” and is not ashamed of his association with social responsibility. However, the battle between the far-left and far-right has left the terminology politically damaged and inhospitable for the current climate.
“I’m ashamed of being part of this conversation,” says Fink. “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 … We talk a lot about decarbonization, we talk a lot about governance … or social issues if that’s something we need to address.”