BlackRock’s ESG push puts CEO Larry Fink in activist crosshairs

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 Nov. 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 in BlackRock, we are increasingly concerned about (i) the reputational risk (including greenwashing risk) to which you have unreasonably exposed the company potentially fueling a gap between the ‘talk’ and the ‘walk’ on ESG investing; and (ii) 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 about $250 million of assets under management compared to BlackRock's $8 trillion.

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In an annual letter to CEO’s published earlier in the year, Fink said "Stakeholder capitalism is not about politics."

"It is not a social or ideological agenda. It is not woke," he continued. "It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities 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 its shareholders. 

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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. "My concern is BlackRock will be increasingly viewed as an ESG risk. If I am a shareholder in a company that acts differently then what it says about itself, I will begin having doubts about the rest of their business."

As an activist investor, Bluebell Capital has also targeted Richemont and Solvay for infractions inconsistent with company policies, while successfully forcing Danone to restructure its management.

Ticker	Security	Last	Change	Change %
BLK	BLACKROCK INC.	1,022.80	+3.35	+0.33%

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A spokesperson for BlackRock told FOX Business "Bluebell has waged a number of campaigns to promote their climate and governance agenda in the past 18 months."

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"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 rest of the industry, according to the company’s spokesperson. 

Currently, BlackRock is the world’s largest asset manager with about $8 trillion under management.