Sep 22, 2022 - Economy & Business

Seeing through the anti-BlackRock noise

Illustration of a hand holding a bullhorn with an earth in the center
Illustration: Sarah Grillo/Axios

Here's an evergreen tweet: BlackRock is being attacked by politicians for its ESG stance.

Why it matters: Politicians, by their nature, are good at making noise. (To be fair, BlackRock founder and CEO Larry Fink is no slouch on that front, either.) But when it comes to investment supertankers like BlackRock, noise is mostly just noise.

Catch up fast: Last month it was Republicans attacking the gargantuan fund manager for being overly zealous when it came to climate commitments.

  • This month it's a Democrat, New York City comptroller Brad Lander, attacking the buy-side behemoth for not being zealous enough.

State of play: Texas, New York City, and other state and local governments are certainly capable in theory of making good on their threats to pull their money from BlackRock, which manages about $20 billion for public funds in Texas, and about $43 billion for NYC.

  • Yes, but: Those sums together account for about 0.6% of BlackRock's total assets under management — enough to get Fink's attention, to be sure, but hardly an existential threat.

The big picture: Climate change is real, and BlackRock, as a major shareholder in every large public company, has an important role to play in encouraging all those companies to work together to minimize carbon emissions and therefore the amount of risk that the overall BlackRock portfolio faces from a warming planet.

  • BlackRock's largest clients, especially in Europe, are aligned with that goal — and BlackRock itself, in its stance, is aligned with other large investors as part of groups like the Glasgow Financial Alliance for Net Zero and the Net Zero Asset Managers Initiative.
  • BlackRock's sheer size, along with its founder's penchant for publicity, tends to land it in the news more frequently than its competitors.
  • But the substantive differences between BlackRock and other big fund managers, when it comes to climate issues, are generally slim.

The bottom line: If you're a politician with a penchant for ideological perorations, then BlackRock is always going to top your list of targets. The rest of BlackRock's clients, however, tend to think about such matters rarely if at all.

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