BlackRock CEO Larry Fink has said he has stopped using the term ESG, stating that it has become “entirely weaponised” by both sides of the political system.
At a speech given at the Aspen Ideas Festival on June 25, Fink revealed his decision to drop the term, but noted that doing so would not change BlackRock’s stance. Fink explained that the asset management giant will continue to talk with portfolio companies about decarbonization, corporate governance, and social issues.
Reiterating an argument from his March 2023 annual letter to investors, Fink stressed that it is not the role of asset managers to “engineer a particular outcome in the economy,” adding that he never intended for his annual letters to become political.
“As I have said consistently over many years now, it is for governments to make policy and enact legislation, and not for companies, including asset managers, to be the environmental police,” Fink said in the annual letter.
BlackRock has attempted to walk a fine line on the issue of climate change, finding itself in the middle of a war between critics of climate-centric investment and campaigner working to force boards to act on reducing emissions.
The asset manager has projected that by 2030, at least three quarters of its investments will be with issuers of securities that have scientific targets to cut net greenhouse gas (GHG) emissions.
However, BlackRock has so far lost around $4 billion in managed assets as a result of the backlash against ESG, with many Republican-led U.S. states pulling their funds. Fink told the Aspen conference that this had represented no material impact on BlackRock’s $9 trillion business.