BlackRock — which for years has courted controversy with its focus on so-called ESG, or Environmental Social Governance investing — is considering an exit of the so-called “Net Zero” coalition of top corporations who pledge to reach zero-carbon emissions by 2050, The Post has learned.
The investment giant led by billionaire CEO Larry Fink is poised for a pivot from dictates of the United Nations-sponsored “Net Zero Asset Managers Initiative” as pressure grows on big corporations to reverse their woke business agendas. It comes as others have announced plans to leave a sister UN coalition for mega banks. In recent days, the nation’s largest bank, JPMorgan Chase, plus Goldman Sachs, Wells Fargo, Bank of America, Citigroup and Morgan Stanley, said they are dropping their membership from the UN climate coalition.
BlackRock’s likely departure is more significant. The world’s largest investment fund, with more than $10 trillion in assets under management, was a leader in ESG investing, with its top executives including Fink evangelizing on the need to use the company’s investing might to force corporations to reduce their carbon footprint. A political backslash recently forced Fink and BlackRock to reverse course on ESG and now other big ESG asset managers are doing so as well.
The Post has learned that State Street and JPMorgan Asset Management are moving toward leaving the asset-management alliance.
BlackRock press officials declined comment. A rep for State Street and JPMorgan didn’t return a call for comment. A press official for the alliance declined to comment.
The Net Zero Initiative describes itself as a is an “international group of asset managers committed, consistent with their fiduciary duty to their clients and beneficiaries, to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.”
When BlackRock joined the Net Zero Initiative in 2021 with other major asset managers and corporations, it was seen as a way to institutionalize so-called sustainable investing in the corporate ecosystem.
But soon thereafter, a swift political backlash developed; sustainable energy investing faced stiff opposition to GOP politicians who ran large state pension funds in red states such as Texas and Florida. Rising inflation came after the COVID lockdowns ended, and higher gas prices following Russia’s invasion of Ukraine made sustainability efforts politically toxic.
Members of Congress even suggested that the Net Zero Alliance violated antitrust laws since it forced corporations to operate in concert to achieve what they called dubious aims of climate sustainability while causing working class people to suffer.
Fink himself became the subject of scorn and BlackRock lost more than $1 trillion on assets as red state treasurers boycotted the firm for managing pension assets.
Fink has been slowly walking back his once strident proselytizing of ESG. BlackRock money managers in the US are no longer under pressure to use ESG screens in all investment decisions, instead doing it just for clients that ask for such methods. It has vastly scaled back supporting ESG-related proxy proposals or shareholder votes. As a result, BlackRock, AUM has largely recovered to $11 trillion.
Leaving the alliance, however, is a further sign that BlackRock and corporate America in general sees even more consumer and political pushback not just in ESG investing, but in all aspects of corporate wokeism.
In recent years major corporations have begun to embrace progressive policies in the boardroom using so-called Diversity Equity and Inclusion policies in hiring and image making.
A consumer backlash ensued as well as a Supreme Court ruling making such de facto hiring quotas illegal, prompting scores of companies to now reverse their DEI policies.
Incoming president Donald Trump has vowed to end DEI in federal contracting, and to issue executive orders reversing the Biden administration’s attempt to employ ESG to scaled back US oil drilling, adding to the pressure on big companies to reverse such progressive policies.
