Culture Wars Seep in as BlackRock Seeks to Defend its ESG Stance
Posted on 09/08/2022
On September 7, 2022, BlackRock Inc., the biggest money manager in the world, published a letter pushing back on one it received in August from 19 Republican state attorneys general who accused BlackRock of putting its climate agenda ahead of clients, collaborating with climate activists, and boycotting U.S. energy companies. Simply-put, BlackRock is in the crosshairs of public pensions from U.S. states who are pro-gun (2nd amendment), pro-oil and gas industry versus states who want to ban firearms (anti 2nd amendment) and want pensions to embrace the Paris Climate Change accord and follow energy-transition investment themes. Over the past decade, climate change activists flexed their political power of influencing pensions and sovereign wealth funds as a means to achieve their goals – a key part of an energy transition away from oil & gas. Interestingly enough, the countries that have sovereign wealth funds and permanent funds receive much of their fiscal wealth from fossil fuels.
Other asset managers are facing similar crosshairs too.
The term “ESG” in the U.S. has gradually been co-opted by politics. For example, recently, officials at the California State Teachers’ Retirement System (CalSTRS) and New York City Retirement Systems requested that credit card companies such as American Express Co., Mastercard Inc., and Visa Inc. should help track gun and ammunition purchases as a way of detecting suspicious activity. It is no secret that California and New York have strict gun laws versus the states of Florida and Texas. This is just one example of how culture wars are seeping into the lucrative world of asset management and the fee-making machines.
