In February, BlackRock pulled out of Climate Action 100+, an investment coalition overseeing $68 trillion in assets.
BlackRock identified its Environmental, Social and Governance (ESG) investment strategy as a risk facing the company, due in part to the increasing political scrutiny surrounding the practice, in a year-end 2023 filing with the Securities and Exchange Commission.
“If BlackRock is not able to successfully manage ESG-related expectations across varied stakeholder interests, it may adversely affect BlackRock’s reputation, ability to attract and retain clients, employees, shareholders and business partners or result in litigation, legal or governmental action, which may cause its AUM, revenue and earnings to decline,” BlackRock wrote in its 10-K form, an annual report to the SEC detailing a company’s financial performance over the previous fiscal year.
The disclosure was first identified by consumer advocate Will Hild, a prominent opponent of ESG investing.
BlackRock told National Review the company has consistently labeled ESG as one of many risk factors for its business in response to questions about the 10-K.
“BlackRock has included risk factors related to ESG and sustainability matters going back several years. In the last 5 years, clients have entrusted BlackRock to manage nearly $1.9 trillion in net new business. They do this because BlackRock serves clients with a range of investment objectives and demands, and as a fiduciary on their behalf, we offer them choices to help them reach those goals,” the firm said.
Republicans in Congress and red states have in recent years launched investigations into BlackRock’s ESG activity and membership in environmental investment coalitions. House Judiciary Committee Chairman Jim Jordan subpoenaed BlackRock last year for records related to its ESG policies for his investigation into the possibility of antitrust violations surrounding left-wing climate initiatives.
Montana Attorney General Austin Knudsen (R) is leading a coalition of over a dozen GOP attorneys general pressing BlackRock on its ESG investments and whether they violate its fiduciary duty. The attorneys general wrote a letter to BlackRock on February 27th voicing concerns about BlackRock’s public statements about ESG and potential conflicts of interest with mutual-fund directors.
“BlackRock’s investors deserve answers about the firm’s Environmental, Social, and Governance investments and potential conflicts of interest with fund directors,” Knudsen said in a statement to NR.
“After pressure from me and attorneys general across the country, BlackRock withdrew from one investment group pushing ESG. However, I still have serious concerns that the firm is not focused on their job, which is to make money for their shareholders, and instead is focused on furthering the left’s woke policies.”
In February, BlackRock pulled out of Climate Action 100+, an investment coalition overseeing $68 trillion worth of assets, and delegated membership to a smaller corporate subsidiary. J.P. Morgan Asset Management and State Street Global Advisors fully withdrew from the climate alliance, both companies previously told NR.
Hild believes BlackRock should do more to distance itself from ESG and supports the Republican AGs investigative efforts.
“The Attorneys General are right to demand answers from BlackRock. While State Street and Vanguard rightfully left the illegitimate climate cartel, Climate Action 100, BlackRock International continues its membership in that group and many others,” Hild told NR.
“It should not take multiple lawsuits, investigations, and divestments for the world’s largest asset management company to do what’s right. I applaud Attorney General Knudsen and all of the attorneys general who continue to fight for the American people.”