Climate investing is still booming at BlackRock, but don’t call it ESG.
Blackrock, the world’s biggest asset manager abandoned ESG investing after a wave of complaints against “woke capitalism” that made the term politically toxic.
Please note, BlackRock CEO Larry Fink Is Doing ‘Transition Investing’ Now.
BlackRock is still wagering that fighting climate change will be a generational investment opportunity—but the company is no longer pushing for changes in corporate behavior, talking about hard-to-quantify social issues or actively promoting ESG investing criteria. Instead, it is directing billions of client dollars toward infrastructure projects that will help speed the transition from fossil fuels.
“Transition investing is specific and concrete. Clients know what we’re talking about,” said Mark Wiedman, who is head of the global client business at BlackRock and a potential successor to Fink. “ESG as a category is a vague grab bag for many clients.”
BlackRock is joining investors such as Brookfield Asset Management in betting on clean-energy infrastructure projects. It doubled down with its recent $12.5 billion deal to buy Global Infrastructure Partners, an infrastructure fund manager that owns and operates energy, transportation, and waste and water companies around the world.
BlackRock’s infrastructure funds have invested in solar power, natural gas made from food waste and cow manure and removing carbon from the atmosphere.
The criticism of Fink started building in 2020, when he wrote in his widely read letter to CEOs that “climate risk is investment risk.” He said BlackRock would be disposed to vote against management and boards at companies that weren’t making progress on sustainability-related practices. The company’s colossal index-fund business makes it among the three largest shareholders in most companies in the S&P 500, so it wields vast shareholder voting power.
A year later, Fink upped the ante when he wrote that BlackRock was “focused on racial equity and social justice in our investment and stewardship activities” and that “advancing a more equitable and inclusive environment” would require going beyond just examining its own culture and talent practices.
The backlash was swift. Even Berkshire Hathaway’s Charlie Munger said: “I think the world of Fink, but I am not sure I want him to be my emperor.”
Conservative activist Leonard Leo financed a multimillion-dollar campaign to stoke opposition to ESG. It led to jabs from Republican presidential candidates and efforts by some Republican states to ban BlackRock from doing business there.
“ESG is unquestionably in a death spiral,” said Terrence Keeley, who ran BlackRock’s official institutions group until 2022 and has since published a book criticizing ESG investing. “BlackRock is logically prioritizing decarbonization because it is a win-win-win. Good for the environment, good for investors and good for BlackRock shareholders.”
ESG is Out, Transition Investing Is In
So it’s good riddance to ESG investing, hello to transition investing.
Blackrock’s investment focus did not change. But its woke push for racial equity and social justice in investment and stewardship activities did.
Biden Weighs Banning Natural Gas Exports
Meanwhile, please note Biden Weighs Banning Natural Gas Exports to Save the Climate
The climate fear mongers are pressuring Biden to ban natural gas exports. Let’s discuss the ramifications.
Russia will sell more natural gas as a result.
Reducing exports does not change global demand. It will only shift the source of the supply.
Biden Promotes Climate Change at the Expense of More Global Poverty
More importantly, please note Biden Promotes Climate Change at the Expense of More Global Poverty
The mad rush to deal with climate change, even if it works (it won’t), has a nasty tradeoff (more global poverty). Click on link for details.
I work at a major research university. Met with the outfit that handles retirement investments. I was heavily invested in oil companies. They were not allowed to invest in them. Left after they told me that. Made a fortune investing in oil.
Well done!
New avatar again ?
Transition investing sounds like investing in all the sex change stuff going on.
I wouldn’t worry about any of this, we have 40+ years of job creating tax cuts that pay for themselves and create those jobs in China/India/Mexico that are going to trickle down any day now.
Mike Johnson and Chuck had a deal : US gov debt will rise from $34T to $36T. $40T
is next.
A good businessman stays away from fads. Nobody knows why they are born and when they die. When they die they die fast. If u moved in u will be stuck with unsold
inventory, with bad items that nobody wants to buy.
One simple way to remove this massive influence on businesses by a small group of organizations is to not allow passive investors to vote. They do not really own shares in the company, they effectively own an index. Unless votes are pushed down to eft/mf account holders, passive investors should remain, well .. passive.
Macy’s closed its SF ESG branch. Googl woke engineers are in shock. AAPL fired it’s ev team. Meta let go ESG employees. Ilan castrated the woke. SF is surfing on radical anti ESG waves.
Ilan wants to harvest H3 on Saturan ring to generates direct current. A helium field was discovered in MN. Biden wants to shut it down bc helium kills frogs.
I bought into about 20 stocks that were looking to take advantage of the energy “transition” around a year ago. Small positions ($100-200 each) just so I could keep track and evaluate each one over time.
Only one of them is “up”. The other nineteen are down, and a few of those are almost out of business.
It’s not an easy area to invest in. These early stage companies are often hurt by higher interest rates; technological delays; lack of skilled labor; poor management; over promising and under delivering.
Meanwhile my oil and gas portfolio continues to do very well. Many companies are producing more while drilling less due to technological advances.
I think it’s too early to get on the ESG money train but you already found that out it seems. I don’t have any ESG stocks, the closest thing is BP but even they seem lost these days as to where to go on green energy.
My big winners are insurance stocks, up 37%, Food stocks like Tyson up 20% and health care up 15% but these are all ‘small’ positions. Still mostly collecting 5% at the roach motel t-bills and 5%+ in dividends from oil stocks and another 10 to 15% selling calls on oil and gas stocks. TLT still working for me too on the longer time horizon.
It’s hard to invest when stocks keep climbing higher and higher, couldn’t find anything I want to jump into right now. I am seeing large volume of put options on SPY for march and april so maybe a correction coming.
Sometimes you gotta wait at the station for the next money train.
Considering the only ever “edge” the mediocrities will ever have, is being transferred unearned wealth by government and The Fed: Just reread your last, “Biden vs Trump poll.” The overtly “woke” is unlikely to be around to redistributing productive people’s earnings in not to long.
We are currently living the prequel to “Idiocracy”.
They (He) would love nothing more, than to continue the charade of goodness. Like most find out, the hard way, you will go broke first if you try (see Bud).
Night-Night ESG, It wasn’t very nice getting to know you…
What will drive the stock market higher when the ESG meme is out? After all, the casino needs to be fed.
Everything ESG was against will now rally.
AI is the next bubble
This is all about talking left and living right. The elites and corporate/government do-gooders all talk like the rest of the herd in order to survive for the next payout.
They are smart enough to understand that the slave wagers can’t be saved and deserve to be fleeced from every dollar possible.
They are just playing the middle and sweeping the money off the table while getting rich on both sides. Just like the Uni-party in Washington.
They all hit the bar after 11 am and laugh about it.
I suppose you could describe it as early investing in fads. When they have run their course you move to the next one. I can’t help to think some of this is trading their book where you buy stock in some company and then tell everybody how wonderful that company is. As others pile in, you sell. Maybe I am too cynical and Fink and company truly believe what they say but I don’t think so. I have known too many fund managers to fall for that.
pump n’ dump
Intended or not, an argument for reelecting Trump.
Larry Fink’s new strategy and marketing lingo fits in well with his own personal life choice. Larry Fink to become Laura Fink? Either way he’s still an fink!
ESG and Transition are strategies to divert retail investors away from profitable investments. The allocation of surplus capital to its most productive use is a grave responsibility. ESG and Transition are the most unproductive investments imaginable.
I mean I have a pretty good imagination, but point taken.
I remember when Dilbert was a corporate parody. Now corporate meeting are a bingo card full of meme word salads.
Scott Adams was right about many things
Blackrock and Larry Fink are just pure evil. They should be forcibly shut down.
NetZero == Genocide
There are currently over 300,000 “Diversity and Inclusion” type of jobs listed by Government Agencies and many large Companies. This system of thinking is still pretty entrenched especially in most Government Agencies. Blackrock as Mish guesses will probably just give the Program a new face rather than removing it.
At most it’s a wakeup call.
Excellent analyses. They lie!