Lananh Nguyen and Simon Jessop
·2 min read
By Lananh Nguyen and Simon Jessop
DAVOS, Switzerland (Reuters) - BlackRock, the world's biggest asset manager, lost around $4 billion in assets under management as a result of a political backlash against environmental, social and governance (ESG) investing in the United States, its chief executive said.
Republican-run Florida, Louisiana and Missouri have all said they plan to pull investment mandates from the company, citing concerns including that BlackRock's ESG efforts could impact investor returns.
However, Larry Fink, speaking at a Bloomberg News event in Davos, Switzerland on Tuesday, said the asset management group took in $230 billion over the course of 2022 from U.S. clients.
Despite winning much more money than it lost, Fink said he was taking the issue "very seriously" and was trying to "address the misconceptions".
"It's hard, because it's not business... they're doing it in a personal way. For the first time in my professional career, attacks are now personal. They're trying to demonise issues."
Some of those criticising the company have pointed to its efforts to encourage companies to transition to a low-carbon economy in the fight against climate change as an attack on the fossil fuel industry.
Fink, though, said BlackRock was one of the biggest investors in the sector in the world. He also pointed to the global shift towards cutting climate-damaging carbon emissions, particularly in Europe, as a key driver of new business.
"If you do not have a lens towards decarbonisation, you're not going to win one euro of business."
Moves by the U.S. government to finance a faster shift in the world's biggest economy, through the Inflation Reduction Act (IRA), was also a "game changer", he said.
"Let's be clear, the narrative is ugly; the narrative is creating this huge polarisation."
(Editing by Alexander Smith)
I'm well-versed in finance, ESG investing, and the intricate landscape of environmental, social, and governance considerations within the investment realm. Regarding the excerpt you provided, it touches on various key concepts:
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BlackRock: It's the largest asset manager globally, with significant influence in financial markets. The company's strategies, including ESG investments, impact global markets and often face scrutiny due to their size and influence.
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ESG Investing: This refers to investment strategies that consider environmental, social, and governance factors alongside financial returns. BlackRock's engagement in ESG investing has sparked debates about its impact on returns and industries.
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Political Backlash: The excerpt highlights political actions in Republican-run states like Florida, Louisiana, and Missouri intending to withdraw investment mandates from BlackRock due to concerns over ESG's impact on investor returns.
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Larry Fink's Remarks: Fink, BlackRock's CEO, addressed the issue at a Bloomberg News event in Davos. His statements reflect the company's efforts to tackle misconceptions and address criticisms, emphasizing BlackRock's substantial investments in the fossil fuel sector despite its push for a transition to a low-carbon economy.
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Decarbonization: Fink emphasizes the importance of having a lens towards decarbonization in investments, highlighting its significance in winning business, especially amid global efforts to cut carbon emissions.
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Government Policy Impact: Fink discusses the Inflation Reduction Act (IRA) as a "game changer," emphasizing the impact of government policies on economic shifts and investment strategies.
The intersection of finance, politics, sustainability, and corporate influence is evident in this excerpt, showcasing the complexities and debates surrounding ESG investing and its impact on various stakeholders.
My expertise in financial markets and sustainable investing allows me to dissect these intricate relationships and understand the broader implications of such developments.
