{"id":1687549,"date":"2022-10-13T07:02:57","date_gmt":"2022-10-13T11:02:57","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1687549"},"modified":"2022-10-13T07:03:02","modified_gmt":"2022-10-13T11:03:02","slug":"as-energy-interests-clash-corporate-americas-green-dream-is-stuck-between-blackrock-and-a-hard-place","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/as-energy-interests-clash-corporate-americas-green-dream-is-stuck-between-blackrock-and-a-hard-place\/","title":{"rendered":"As Energy Interests Clash, Corporate America\u2019s Green Dream Is Stuck Between BlackRock And A Hard Place"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">32<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fas-energy-interests-clash-corporate-americas-green-dream-is-stuck-between-blackrock-and-a-hard-place%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1687549&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div><img decoding=\"async\" src=\"https:\/\/thefederalist.com\/wp-content\/uploads\/2022\/10\/BlackRock.jpg\" class=\"ff-og-image-inserted\" alt=\"image\" \/><\/div>\n<p>Hell hath no fury like a comptroller scorned; just ask Larry Fink. The CEO of the world\u2019s largest asset manager, BlackRock, is currently embroiled in an uncomfortable m\u00e9nage \u00e0 trois with Texas Comptroller Glenn Hegar and NYC Comptroller Brad Ladner. Embrace fossil fuels, says Texas. Denounce them, says New York. So far, BlackRock has inexplicably tried to do both, hoping that the promises whispered in the ears of certain states wouldn\u2019t be heard by others. But these whispers have now become political rallying cries, and BlackRock is paying the price.<\/p>\n<p>Two weeks ago, the Texas comptroller \u2014 who oversees the state\u2019s finances, including regulations affecting its $300 billion pension funds \u2014 <a href=\"https:\/\/thetexan.news\/fossil-fuel-divestor-blackrock-ceo-touts-decarbonization-esg-at-clinton-global-initiative-meeting\/\" target=\"_blank\" rel=\"noreferrer noopener\">accused<\/a> BlackRock of \u201cdoublespeak\u201d by \u201cengaging in anti-oil and gas rhetoric publicly yet present[ing] a much different story behind closed doors.\u201d NYC\u2019s Ladner largely <a href=\"https:\/\/comptroller.nyc.gov\/wp-content\/uploads\/2022\/09\/Letter-to-BlackRock-CEO-Larry-Fink.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">agrees<\/a>, though from the opposite side. He noted an \u201calarming\u201d \u201ccontradiction between Blackrock\u2019s statements and actions\u201d and accused the financial titan of \u201cbacktracking on its climate commitments\u201d in a letter the day before.<\/p>\n<p>Mr. Fink\u2019s reasons for backpedaling are clear: Environmental, Social, and Governance (ESG) investing now faces a dual crisis of public backlash and investment underperformance.\u00a0But as BlackRock backs away from its ESG commitments, states like New York are saying you\u2019d better make good on your promises or face the consequences, thus creating an inescapable bind.<\/p>\n<p>Since 2018, Larry Fink has demanded corporate America embrace so-called \u201cstakeholder capitalism\u201d by considering the broader \u201c<a href=\"https:\/\/www.wsj.com\/articles\/blackrock-ceo-to-companies-pay-attention-to-societal-impact-1516120840\" target=\"_blank\" rel=\"noreferrer noopener\">societal impact<\/a>\u201d of its activities. He has called for companies to reduce emissions, increase diversity, and commit to other ESG goals.\u00a0And the strategy has paid off: BlackRock\u2019s ESG funds went from a niche investment category to over $500 billion in assets under management. \u201cSustainable assets\u201d\u00a0<a href=\"https:\/\/www.marketsmedia.com\/blackrock-esg-assets-pass-500bn\/\" target=\"_blank\" rel=\"noreferrer noopener\">more than doubled<\/a>\u00a0in 2021 alone.\u00a0<\/p>\n<p>But in 2022, Russia invaded Ukraine, gas prices surged, inflation soared, and recession fears materialized. Because of this and a host of ill-conceived domestic energy policies, ESG funds underperformed, especially in sectors they had shunned, such as oil, gas, and coal. Clients missed out on those gains while watching their investments sharply decline.<\/p>\n<p>So, as ESG-linked strategies underperform, Larry Fink tiptoes away. This past May, BlackRock <a href=\"https:\/\/www.blackrock.com\/corporate\/literature\/publication\/commentary-bis-approach-shareholder-proposals.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">announced<\/a> it would \u201csupport fewer\u201d climate proposals after Fink proclaimed that BlackRock \u201c<a href=\"https:\/\/www.cnbc.com\/2022\/01\/18\/blackrock-ceo-larry-fink-defends-stakeholder-capitalism-as-not-woke.html#:~:text=%E2%80%9CIt%20is%20not%20%27woke.,instead%20should%20work%20with%20governments.\" target=\"_blank\" rel=\"noreferrer noopener\">is not \u2018woke.\u2019<\/a>\u201d At the Chevron Corporation, BlackRock\u2019s investment team opposed a carbon emissions cap it supported in 2021, <a href=\"https:\/\/www.blackrock.com\/corporate\/literature\/press-release\/vote-bulletin-chevron-may-2022.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">citing<\/a> the environmental progress Chevron had already made; Larry Fink <a href=\"https:\/\/www.bloomberg.com\/news\/videos\/2022-06-02\/fink-blackrock-doesn-t-want-to-be-environmental-police-video\" target=\"_blank\" rel=\"noreferrer noopener\">pretended<\/a> BlackRock had not supported the 2021 proposal at all and shockingly said that he had always been against Scope 3 emissions caps.<\/p>\n<p>Behind closed doors, there\u2019s another reason for the change: Republicans threaten to pull business. In the past year, red states have been incensed over BlackRock\u2019s \u201cnet zero\u201d strategy that harms the coal, oil, and gas sectors on which their state economies rely. Texas\u00a0<a href=\"https:\/\/www.texastribune.org\/2022\/03\/16\/texas-fossil-fuel-divestment-ban-inquiry\/\" target=\"_blank\" rel=\"noreferrer noopener\">passed<\/a>\u00a0a law punishing fossil fuel boycotters and later <a href=\"https:\/\/comptroller.texas.gov\/about\/media-center\/news\/20220824-texas-comptroller-glenn-hegar-announces-list-of-financial-companies-that-boycott-energy-companies-1661267815099\" target=\"_blank\" rel=\"noreferrer noopener\">barred<\/a> new investments in BlackRock by name. West Virginia\u00a0<a href=\"https:\/\/thefederalist.com\/2022\/01\/18\/west-virginia-treasurer-riley-moore-drops-blackrock-over-woke-capitalism\/\" target=\"_blank\" rel=\"noreferrer noopener\">pulled<\/a>\u00a0its BlackRock investments entirely.\u00a0<\/p>\n<p>In response, BlackRock has been scrambling to assure red state pension fund managers that it never really meant what it said. One Texas official <a href=\"https:\/\/www.theguardian.com\/environment\/2022\/mar\/09\/blackrock-privately-soothes-oil-industry-fears-over-its-new-green-credentials\" target=\"_blank\" rel=\"noreferrer noopener\">memorialized<\/a> such a discussion, saying it was \u201cnice to hear that BlackRock didn\u2019t mean \u2014 or no longer believes \u2014 many of the disagreeable things the company and Mr. Fink have said.\u201d Publicly, BlackRock\u2019s retreat has been no less pronounced: \u201cBlackRock does not boycott energy companies,\u201d it now claims. Nor does it \u201cdictate to companies what specific emission targets they should set or what type of political lobbying they should pursue.\u201d<\/p>\n<p>But washing one\u2019s hands of ESG commitments is not so easy. New York, for one, has held BlackRock\u2019s feet to the fire, threatening to pull its pension funds from BlackRock\u2019s control. And the SEC has been equally clear that once ESG promises are made, firms must follow through, as recent investigations at <a href=\"https:\/\/www.wsj.com\/articles\/sec-is-investigating-goldman-sachs-over-esg-funds-sources-say-11654895917\" target=\"_blank\" rel=\"noreferrer noopener\">Goldman Sachs<\/a> and <a href=\"https:\/\/www.sec.gov\/news\/press-release\/2022-86\" target=\"_blank\" rel=\"noreferrer noopener\">BNY Mellon<\/a> have shown.<\/p>\n<p>Large asset managers like BlackRock can manage investments for either socially minded clients or financially minded clients \u2014 but not both \u2014 especially if they push ESG principles in corporate boardrooms. BlackRock cast its die on the side of signaling virtue and profited handsomely.\u00a0<\/p>\n<p>Now it must own the consequences of that choice. If states like New York mandate BlackRock shun fossil fuels, while Texas demands otherwise, a bifurcated market becomes inevitable. That\u2019s bad news for BlackRock but good news for society: Everyone loses when a single asset manager wields undue power over $10 trillion of capital representing diverse client interests.<\/p>\n<hr class=\"wp-block-separator\" \/>\n<p>\n  Justin Danhof is the executive vice president for the National Center for Public Policy Research.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hell hath no fury like a comptroller scorned; just ask Larry Fink. The CEO of the world\u2019s largest asset manager, BlackRock, is currently embroiled in an uncomfortable m\u00e9nage \u00e0 trois<\/p>\n","protected":false},"author":1434,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1687549","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1687549","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1434"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1687549"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1687549\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1687549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1687549"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1687549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}