26 May 2021 BlackRock Defends Burdening Other Companies With Risks and Costs Associated With ESG Goals
Washington, D.C. – BlackRock executives today defended their attempts to pressure other companies to adopt left-wing Environmental, Social and Corporate Governance (ESG) policies – ignoring the risks and problematic assumptions that come with ESG goals.
BlackRock and you, Mr. Fink, have taken an aggressive stand in favor of ESG investing, which is to say, in making investments on the basis of left-of-center assumptions about society, the economy and the future. You’ve gone so far as to try to make Warren Buffett bend to your personal policy preferences, as built into the ideologically driven reporting demands you support. Warren Buffett called your demands “asinine,” and demonstrative of “moral judgments” about which it is “very tough” to decide their real benefit to society.
Do you really think you know how to run Berkshire Hathaway better than Warren Buffet does? And can you explain in detail what you do to ensure your proxy decisions reflect the actual wishes of your investors instead of those of BlackRock executives?
The question was significantly pared down by BlackRock staff and presented as:
We’ve also received questions from Scott Shepard and Tim Smith on how we make decisions on proxy voting.
BlackRock CEO Larry Fink responded:
Well, I’m gonna pass this off to Sandy, but let me just make one key point. Our stewardship function, which I take very strongly, is a part of our fiduciary duty to our clients, to our asset owners. We take this responsibility very seriously and this is why we have built the largest corporate stewardship team in the global capital markets. Nobody has the scale and the size that we have in terms of engagement with our companies that we invest in. So the question is: What drives long-term value for stakeholders of these companies? I think Sandy would be the best to answer that question.
Sandy Boss, BlackRock’s Global Head of Investment Stewardship, added, in part:
As Larry said, when we engage with and vote on a company, we are doing that with a singular purpose: maximizing long-term value for shareholders. This is not about advancing any individual’s values; it’s about our clients. That’s why, for example, Larry spoke about our updating our capital markets assumptions around our investment convictions of the role that climate risk plays in the long-term value of our clients’ investments. That’s what we are doing, is we are responding to those investment convictions.
What I would say is, our investment stewardship team is fully transparent regarding our policies for, you know, how we engage, how we vote, how we manage conflicts of interest, and we’ve taken a number of steps to mitigate any kind of perceived or potential conflict. You can find all that information on the investment stewardship section of BlackRock.com. We endeavor, in addition to what Larry said about being, you know, making the biggest investment in stewardship, we also endeavor to really set a high mark for transparency in everything that we do. We think we owe that to all of our stakeholders; it’s very important to our clients.
The truncated question, and Fink’s and Boss’s answers, can be heard here.
After the meeting, Shepard responded:
Fink asserted a number of times during the meeting that the company’s ESG decisions are driven by investors and by objective research. But BlackRock only allows investors to “drive” in the direction that Fink wants to go. He offers ESG funds, and then votes the proxies of those investors in ways that force companies to adopt Fink’s personal policy preferences – dressed up as ESG. But so far as we can tell, he does not vote the proxies of investors in non-ESG funds against left-wing shareholder activist proposals and left-wing activist board-of-director candidates. This makes a lie of his claim simply to be offering additional choices to investors, and then doing their bidding.
Likewise, Fink offers lots of left-wing ESG funds, but none for the millions of us who think that politically-driven zero-carbon targets like those espoused by the United Nations and eco-activists are insane, that constant injections of race and sex into business structures and decisions are racist and sexist, and that both of these agendas are detrimental to the long-term value of companies. Again, this belies his claims that he’s doing the will of investors rather than substituting his own personal interests and claiming they represent all investors.
Fink’s and Boss’s claims that these decisions are made after objective evaluations of long-term company value are also hollow. They do not consider the risks that arise if international competition does not embrace, in real-world fact, the UN’s carbon-reduction schedules; the meaninglessness of the United States acting alone under those conditions; the difficulties and environmental harms that arise from the high use of rare earth metals, which are mostly in China; and the unlikelihood of being able to achieve zero-carbon goals on the proposed political timetables without crushing the living standards of average Americans.
Fink and Boss don’t care about any of this. But the courts might, and about their patent efforts to obscure the true implications of their actions, as seen today.
Conservative investors can learn how to oppose leftism in corporate America by downloading FEP’s new 2021 Investor Value Voter Guide and Balancing the Boardroom voting guide. The new website Stop Corporate Tyranny also provides tools for engagement with corporate leaders.
Today’s meeting marks the 32nd time FEP has participated in a shareholder meeting in 2021. To schedule an interview with a member of the Free Enterprise Project on this or other issues, contact Judy Kent at (703) 477-7476.
Launched in 2007, the National Center’s Free Enterprise Project focuses on shareholder activism and the confluence of big government and big business. Over the past four years alone, FEP representatives have participated in over 100 shareholder meetings – advancing free-market ideals about health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers’ rights and other important public policy issues. As the leading voice for conservative-minded investors, it annually files more than 90 percent of all right-of-center shareholder resolutions. Dozens of liberal organizations, however, annually file more than 95 percent of all policy-oriented shareholder resolutions and continue to exert undue influence over corporate America.
FEP activity has been covered by media outlets including the New York Times, Washington Post, USA Today, Variety, the Associated Press, Bloomberg, Drudge Report, Business Insider, National Public Radio and SiriusXM. FEP’s work is prominently featured in Stephen Soukup’s new book The Dictatorship of Woke Capital: How Political Correctness Captured Big Business (Encounter Books) and Kimberley Strassel’s 2016 book The Intimidation Game: How the Left is Silencing Free Speech (Hachette Book Group).
The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 60,000 active recent contributors.
Sign up for email updates here. Follow us on Twitter at @FreeEntProject and @NationalCenter for general announcements. To be alerted to upcoming media appearances by National Center staff, follow our media appearances Twitter account at @NCPPRMedia.