BlackRock CEO Larry Fink is under fire for the company's aggressive Environmental, Social and Governance ESG messaging and is being asked to step down by one of its smallest shareholders and activist investor Bluebell Capital.
On November 10, Bluebell Capital partners and CIO s Giuseppe Bivona and Marco Taricco sent a letter to the BlackRock CEO outlining the asset manager's contradictions and inconsistencies on ESG investing and the politicization of the ESG debate.
As shareholder at BlackRock, we are increasingly concerned about reputational risk, including greenwashing risk that you have exposed the company, which could cause a gap between the talk and the walk on ESG investing and the backlash caused by BlackRock's ESG strategy, which has alienated clients and attracted an undesired level of negative publicity, the letter said.
Bluebell has $250 million of assets under management, compared to BlackRock's $8 trillion.
In an annual letter to CEOs published earlier in the year, Fink said that stakeholder capitalism is not about politics. He continued, "It is not woke." It's capitalism driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities that your company relies on to prosper. This is the power of capitalism. Bluebell, which holds roughly 0.01% of BlackRock, also highlighted the company's failure to fulfill commitments and failure to support environmental and corporate social responsibility as key drivers in violating the fiduciary responsibility of shareholders.
In an interview with FOX Business, Bluebell s Bivona said We have a lot of admiration for BlackRock, but as a shareholder we are very concerned with what they are doing with ESG. When you are an important shareholder, and you endorse environmental, social, and governance practice, it is not in the interest of your shareholders and there is an issue, he cautioned. I think BlackRock will be viewed as an ESG risk. I have doubts about the rest of the business if I am a shareholder in a company that acts differently than what it says about itself. Bluebell Capital has also targeted Richemont and Solvay for infractions inconsistent with company policies, while forcing Danone to restructure its management.
A spokesman for BlackRock told the FOX Business Bluebell that they have waged a number of campaigns to promote their climate and governance agenda in the past 18 months. BlackRock Investment Stewardship did not support their campaigns, as we did not consider them to be in the best economic interests of our clients. Since the IPO, BlackRock has produced 9000% returns and generated $250 billion in long term inflows over the first three quarters of 2022, and $65 billion in the third quarter alone against outflows throughout the industry, according to the company spokesman.
BlackRock is the world's largest asset manager with $8 trillion under management.