BlackRock: Blasted by the Left and the Right

 

When I first wrote about the machinations of BlackRock, a financial investment firm, I reported that 19 Attorneys General had focused on the company for its Environmental, Social and Governance (ESG) programs, because it was targeting companies in the fossil fuel and related industries. Ultimately, BlackRock could be putting companies out of business due to discriminatory lending practices, as well as other illegal actions. BlackRock backpedaled, trying to explain and justify their positions to these Republican AGs.

As a result, angry and activist Leftists protested BlackRock and their justifications, claiming they were not doing enough for the environment:

Climate activists have gathered inside the headquarters of financial investment firm Black Rock to protest what the company’s investment in fossil fuels.

This is the third straight day of climate protests in New York City, led by activist groups like New York Communities for Change (NYCC) and the New York chapters of the Sunrise Movement and Extinction Rebellion.

It seems like BlackRock can’t get a break. Do I hear schadenfreude? Do I see being stuck between a rock and a hard place? The protestors were adamant about their efforts to promote climate change, and declaring that BlackRock was abusing its position in the financial world:

Several protesters wielded pitchforks, while others carried green-and-white banners saying, ‘How dare you plunder the Earth,’ ‘Your investments are killing us’ and ‘Your greed = climate chaos,’ according to the video. At one point, the footage showed a person pouring rocks on the descending escalator.

The NYPD confirmed to FOX Business that there was a demonstration at the location. There were 10 arrests, the police said.

As if these protests were not disturbing enough, the Comptroller for the City of New York, Brad Lander, piled on.

‘Unfortunately, despite these repeated proclamations, in its September 6 response to the attorneys general, BlackRock now abdicates responsibility for driving net zero alignment in its own portfolio by saying that it does not ask companies to set specific emissions targets, and that its participation in NZAMI does not mean BlackRock is setting or meeting any net zero targets,’ Lander wrote, condemning the company for going ‘so far as to tout its continued investment in fossil fuels.’

‘The fundamental contradiction between BlackRock’s statements and actions is alarming,’ Lander continued. ‘BlackRock cannot simultaneously declare that climate risk is a systemic financial risk and argue that BlackRock has no role in mitigating the risks that climate change poses to its investments by supporting decarbonization in the real economy.’

BlackRock’s dilemma is a great source of satisfaction to me. It’s easy to focus on their situation where they are squeezed between the Left and Right. But there are also hundreds, even thousands of people, whose lives have been decimated by the Biden climate decisions and the uncertainty about the future. People who had worked in fossil fuels and related industries have been forced to look for work elsewhere due to the impractical, foolish, and economically instituted policies of the federal government and those virtue signaling by jumping on the ESG bandwagon. And, of course,  hundreds of thousands of people will struggle to pay their fuel bills this winter.

Let’s see what BlackRock and its cohorts try to do next.

Published in Domestic Policy
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  1. Gossamer Cat Coolidge
    Gossamer Cat
    @GossamerCat

    “Lie down with dogs, get up with fleas” as the saying goes.  They deserve all the grief that they get  and I am glad that they are now universally loathed.  

    • #1
  2. Hoyacon Member
    Hoyacon
    @Hoyacon

    Has Blackrock been charged with a crime?  Honest question.

    EDIT:  It doesn’t look like it based on 5 mins.  research.  There are “investigations.”

    • #2
  3. Percival Thatcher
    Percival
    @Percival

    Susan Quinn:

    BlackRock’s dilemma is a great source of satisfaction to me. It’s easy to focus on their situation where they are squeezed between the Left and Right. But there are also hundreds, even thousands of people, whose lives have been decimated by the Biden climate decisions and the uncertainty about the future. People who had worked in fossil fuels and related industries have been forced to look for work elsewhere due to the impractical, foolish and economically instituted policies of the federal government and those virtue signaling by jumping on the ESG bandwagon. And of course,  hundreds of thousands of people will struggle to pay their fuel bills this winter.

    Play stupid games – win stupid prizes.

    Let’s see what BlackRock and its cohorts try to do next.  

    They’ve got fewer friends than Vladimir Putin.

     

    • #3
  4. Full Size Tabby Member
    Full Size Tabby
    @FullSizeTabby

    Once again the Ricochetti demonstrate that Ricochet members are smarter than the so-called “experts” running many of the “important” institutions of American life. Ricochet posts and comments have noted for years that appeasement of “the left” never has an end point. “The left” will always move the goal posts, and so will never be satisfied. Therefore it is pointless to try to appease “the left.” Yet BlackRock and other “important” institutions persist in attempting to appease “the left.” 

    • #4
  5. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Hoyacon (View Comment):

    Has Blackrock been charged with a crime? Honest question.

    EDIT: It doesn’t look like it based on 5 mins. research. There are “investigations.”

    Correct. Investigations are ongoing.

    • #5
  6. Full Size Tabby Member
    Full Size Tabby
    @FullSizeTabby

    Hoyacon (View Comment):

    Has Blackrock been charged with a crime? Honest question.

    I don’t think so. I think the charges are “civil” violations of the fiduciary duty to the financial wellbeing of its clients and its clients employees and investors. 

    • #6
  7. Hoyacon Member
    Hoyacon
    @Hoyacon

    Full Size Tabby (View Comment):

    Hoyacon (View Comment):

    Has Blackrock been charged with a crime? Honest question.

    I don’t think so. I think the charges are “civil” violations of the fiduciary duty to the financial wellbeing of its clients and its clients employees and investors.

    Yes.  That makes sense.  West Virginia has pulled a bunch of money from them, and I think “vote with your feet” is the proper response.

    • #7
  8. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    • #8
  9. Chris O Coolidge
    Chris O
    @ChrisO

    Full Size Tabby (View Comment):

    Hoyacon (View Comment):

    Has Blackrock been charged with a crime? Honest question.

    I don’t think so. I think the charges are “civil” violations of the fiduciary duty to the financial wellbeing of its clients and its clients employees and investors.

    That is the language the Missouri AG (as well as the West Virginia Treasurer, I think) used, not a “violation,” but a “breach” of fiduciary duty to its clients. So, at this point it’s a contractual thing, not criminal.

    • #9
  10. Hoyacon Member
    Hoyacon
    @Hoyacon

    Susan Quinn (View Comment):

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    I’m uneasy about this without knowing more.  They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude.  If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism.  The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    • #10
  11. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Hoyacon (View Comment):

    Full Size Tabby (View Comment):

    Hoyacon (View Comment):

    Has Blackrock been charged with a crime? Honest question.

    I don’t think so. I think the charges are “civil” violations of the fiduciary duty to the financial wellbeing of its clients and its clients employees and investors.

    Yes. That makes sense. West Virginia has pulled a bunch of money from them, and I think “vote with your feet” is the proper response.

    Louisiana has already pulled $794 million. So BR can give all the excuses they wish, but it’s going to cost them. 

    • #11
  12. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Hoyacon (View Comment):
    I’m uneasy about this without knowing more.  They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude.  If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism.  The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    I want the AGs to only do what the law permits. Just because investment companies have been given wide latitude does not justify any of the actions they could take for ESG. And BlackRock has been a big proponent. The problem is not whether they’ve done anything inappropriate, but whether they  could or will. They can’t be watched every minute.

    • #12
  13. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Hoyacon (View Comment):

    Susan Quinn (View Comment):

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    The ESG companies have tried to say they make more for their investors with the ESG purchases. When all is taken into account it simply isn’t true. They could actually be costing their investors money by avoiding certain investments.

    • #13
  14. Hoyacon Member
    Hoyacon
    @Hoyacon

    Susan Quinn (View Comment):

    Hoyacon (View Comment):
    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    I want the AGs to only do what the law permits. Just because investment companies have been given wide latitude does justify any of the actions they could take for ESG. And BlackRock has been a big proponent. The problem is not whether they’ve done anything inappropriate, but whether they could or will. They can’t be watched every minute.

    Tha AGs should not be policing prospective actions.  By now, Blackrock’s investors and prospective clients should know full well what they are getting into, and they can make an informed decision, which is what the market should be about.  There is something faintly leftist about punishing a company for its investment ideals, provided no one is being deceived or defrauded.

    • #14
  15. Hoyacon Member
    Hoyacon
    @Hoyacon

    Susan Quinn (View Comment):

    Hoyacon (View Comment):

    Susan Quinn (View Comment):

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    The ESG companies have tried to say they make more for their investors with the ESG purchases. When all is take into account it simply isn’t true. They could actually be costing their investors money by avoiding certain investments.

    Whether or not it’s true is likely a very complicated question.   If they are going the ESG route with full knowledge that it costs investors returns, they should be punished.

    • #15
  16. Bryan G. Stephens Thatcher
    Bryan G. Stephens
    @BryanGStephens

     Blackrock is working hard to turn us into renters.

    • #16
  17. Old Bathos Moderator
    Old Bathos
    @OldBathos

    James Carville warned Democrats 20 years ago about giving to much attention to the sexual identitarians and whatever else hard lefties were pushing. “You can never make those folks happy.”  

    The woke do not have principles, only tactically useful beliefs of the moment. Trying to get their approval merely guarantees future disapproval for not adapting/capitulating when the requisite beliefs change.

    What makes Black Rock especially stupid is that they could have more easily and cheaply bought lefty groups to cheer for them and serve as a buffer.  The lack of creativity at the top is appalling and diagnostic.

    I knew a strategic genius who, a few decades ago, foresaw anti-smoking legislation emerging in NYC government and how that might set a precedent.  He advised his client (a certain large company with a large tobacco subsidiary) to contribute widely to the art and theater sectors in the city. When a bill to restrict smoking a tobacco sales was introduced, a who’s who of the museum, gallery and stage community (some real local heavy hitters) opposed the bill fearing it jeopardized this funding channel. Stunned, the council dropped it and it was not until national movements and legislation later arose that these kinds of restrictions came about. Spending a multiple of that on standard lobbying would have likely failed.

    What kind of an idiot CEO gets an immensely wealthy, almost untouchable enterprise into a position where it needs greenie and woke approval rather than making activist groups dependent on whatever crumbs the enterprise could provide to silence or at least mute predictable criticisms. Managerial malpractice.

    • #17
  18. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Hoyacon (View Comment):
    Tha AGs should not be policing prospective actions.  By now, Blackrock’s investors and prospective clients should know full well what they are getting into, and they can make an informed decision, which is what the market should be about.

    I expect that, like a lot of investors, they assume the financial company is telling them the truth. How many investors in other situations, even knowledgable ones, have been taken for a ride? Bernie Madoff comes to mind. It’s good to state what the market should be about, but what happens when a company misleads it investors? When it tells them that following ESG won’t cost them? There may be a lot of people who only look at the bottom line and whether it’s on the plus side, and may not realize they’ve paid dearly for some of those ESG investments and other purchases have covered for them. Maybe you are correct. Like my husband and I, maybe they should track every company which is an investment.

    • #18
  19. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Old Bathos (View Comment):
    What kind of an idiot CEO gets an immensely wealthy, almost untouchable enterprise into a position where it needs greenie and woke approval rather than making activist groups dependent on whatever crumbs the enterprise could provide to silence or at least mute predictable criticisms. Managerial malpractice.

    To clarify for myself, OB, are you suggesting that the idiot CEO invest in the greenies so they will feel beholden, and certainly supported, and then he can do what he wants to do more subtley? And the greenies will never realize what hit them. My mind is just not devious enough to fully grasp it.

    • #19
  20. Old Bathos Moderator
    Old Bathos
    @OldBathos

    Susan Quinn (View Comment):

    Old Bathos (View Comment):
    What kind of an idiot CEO gets an immensely wealthy, almost untouchable enterprise into a position where it needs greenie and woke approval rather than making activist groups dependent on whatever crumbs the enterprise could provide to silence or at least mute predictable criticisms. Managerial malpractice.

    To clarify for myself, OB, are you suggesting that the idiot CEO invest in the greenies so they will feel beholden, and certainly supported, and then he can do what he wants to do more subtley? And the greenies will never realize what hit them. My mind is just not devious enough to fully grasp it.

    Never willingly put yourself in a position of deference to people who actually hate you and simply want power. If you need to deal with them at all, get leverage over them–never the other way around.

    • #20
  21. David Foster Member
    David Foster
    @DavidFoster

    Many of the Blackrock funds  for which they are voting proxies are in fact index funds.  Someone pointed out that if you’re running an index fund…but still vote proxies for the companies in which the fund is invested…you’re basically saying that you’re not smart enough to decide what companies to invest in, but you are smart enough to tell them how to run their businesses.

    • #21
  22. Hoyacon Member
    Hoyacon
    @Hoyacon

    David Foster (View Comment):

    Many of the Blackrock funds for which they are voting proxies are in fact index funds. Someone pointed out that if you’re running an index fund…but still vote proxies for the companies in which the fund is invested…you’re basically saying that you’re not smart enough to decide what companies to invest in, but you are smart enough to tell them how to run their businesses.

    Or your own investors want you to do just that.

    I’d be interested to know how much money Blackrock holds from union pension funds.

    • #22
  23. Hoyacon Member
    Hoyacon
    @Hoyacon

    This is from MarketWatch (10/25).

    BlackRock’s agreement with American International Group to manage up to $150 billion of the insurer’s assets when it spins off its AIG Life and Retirement division into a newly created entity is one of the drivers of these significant inflows. AIG committed its money to BlackRock due to its investment performance and the Aladdin platform, which enables customers to evaluate and manage risks on public and private assets.

    That is a whole lot of money, and I would expect that AIG is well aware of Blackrock’s philosophies.

    • #23
  24. Gossamer Cat Coolidge
    Gossamer Cat
    @GossamerCat

    Susan Quinn (View Comment):

    Hoyacon (View Comment):

    Susan Quinn (View Comment):

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    The ESG companies have tried to say they make more for their investors with the ESG purchases. When all is take into account it simply isn’t true. They could actually be costing their investors money by avoiding certain investments.

    From a WSJ piece on the California’s public employees’ retirement system (CALPERS)

    A 2010 piece had noted:  “New funds are springing up that blend quantitative investing, using financial data and computer models, with socially responsible investing, a method of picking stocks based on a company’s environmental, social and governance practices, known as ESG… Calpers has committed $500 million to ESG investing, mainly by avoiding stocks that rank low on the ESG scale. But the returns haven’t been satisfactory, Calpers said.”

    And just a few weeks ago: 

    The nation’s largest pension fund got a scathing performance review Monday when its new investment chief highlighted the retirement system’s underperforming returns…

    The unusually candid presentation to board members of the California Public Employees’ Retirement System, known as Calpers, showed returns lagging behind other large pensions in almost every asset class during the past 10 years, with private equity trailing the most, 1.3 percentage points…

    “I am a little disappointed, and I get it, I know there’s lots of things that go into the buckets of why our performance has been poor,” said board president Theresa Taylor.

    • #24
  25. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Gossamer Cat (View Comment):

    Susan Quinn (View Comment):

    Hoyacon (View Comment):

    Susan Quinn (View Comment):

    These investigations from so many AGs are a warning to other companies that it won’t be so easy to take action against fossil fuel companies. No one wants to invite hassles.

    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    The ESG companies have tried to say they make more for their investors with the ESG purchases. When all is take into account it simply isn’t true. They could actually be costing their investors money by avoiding certain investments.

    From a WSJ piece on the California’s public employees’ retirement system (CALPERS)

    A 2010 piece had noted: “New funds are springing up that blend quantitative investing, using financial data and computer models, with socially responsible investing, a method of picking stocks based on a company’s environmental, social and governance practices, known as ESG… Calpers has committed $500 million to ESG investing, mainly by avoiding stocks that rank low on the ESG scale. But the returns haven’t been satisfactory, Calpers said.”

    And just a few weeks ago:

    The nation’s largest pension fund got a scathing performance review Monday when its new investment chief highlighted the retirement system’s underperforming returns…

    The unusually candid presentation to board members of the California Public Employees’ Retirement System, known as Calpers, showed returns lagging behind other large pensions in almost every asset class during the past 10 years, with private equity trailing the most, 1.3 percentage points…

    “I am a little disappointed, and I get it, I know there’s lots of things that go into the buckets of why our performance has been poor,” said board president Theresa Taylor.

    Thanks, Gossamer Cat! I knew I’d seen something about CALPERS!

    • #25
  26. DMak Member
    DMak
    @DMak

    A few days ago, I was watching some news clips on YouTube when a BlackRock advertisement popped up several times. A little unexpected, as I’ve never seen any advertisements from BlackRock or any other investment firm before. Perhaps some investors withdrew their funds after all.

    • #26
  27. Full Size Tabby Member
    Full Size Tabby
    @FullSizeTabby

    Hoyacon (View Comment):

    Susan Quinn (View Comment):

    Hoyacon (View Comment):
    I’m uneasy about this without knowing more. They do have a fiduciary duty to make good investments, but investment companies have traditionally been given wide latitude. If the company legitimately believes its investments are appropriate, well . . . that’s Capitalism. The boss, Fink, has been pretty quiet lately, so maybe he’s learned a lesson about opening his mouth.

    I want the AGs to only do what the law permits. Just because investment companies have been given wide latitude does justify any of the actions they could take for ESG. And BlackRock has been a big proponent. The problem is not whether they’ve done anything inappropriate, but whether they could or will. They can’t be watched every minute.

    Tha AGs should not be policing prospective actions. By now, Blackrock’s investors and prospective clients should know full well what they are getting into, and they can make an informed decision, which is what the market should be about. There is something faintly leftist about punishing a company for its investment ideals, provided no one is being deceived or defrauded.

    One of the issues at least some of the AGs are looking at is that there are several layers between BlackRock and the actual investors, such that the investors don’t have the opportunity to select BlackRock versus some other fund manager. Often it’s employees putting money into their employer’s 401k plan, the management of which 401k plan the employer outsources to some benefits management company, which benefits management company in turn hires BlackRock. 

    • #27
  28. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    DMak (View Comment):

    A few days ago, I was watching some news clips on YouTube when a BlackRock advertisement popped up several times. A little unexpected, as I’ve never seen any advertisements from BlackRock or any other investment firm before. Perhaps some investors withdrew their funds after all.

    DMak, I’m suddenly seeing their ads on TV, too. Something is definitely going on.

    • #28
  29. Susan Quinn Contributor
    Susan Quinn
    @SusanQuinn

    Full Size Tabby (View Comment):
    One of the issues at least some of the AGs are looking at is that there are several layers between BlackRock and the actual investors, such that the investors don’t have the opportunity to select BlackRock versus some other fund manager. Often it’s employees putting money into their employer’s 401k plan, the management of which 401k plan the employer outsources to some benefits management company, which benefits management company in turn hires BlackRock. 

    That would explain a lot.

    • #29
  30. Chris O Coolidge
    Chris O
    @ChrisO

    DMak (View Comment):

    A few days ago, I was watching some news clips on YouTube when a BlackRock advertisement popped up several times. A little unexpected, as I’ve never seen any advertisements from BlackRock or any other investment firm before. Perhaps some investors withdrew their funds after all.

    May be an ominous sign as they lost, what? $1.3 trillion of their clients’ assets last year? Not sure how anyone has confidence in them. You have to be fully committed to ESG to hire them now, I would think.

    Edit: to clarify, I’m imagining a need for a stopgap infusion of new assets to counteract the outflow of both accounts and capital.

    • #30
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