Blackrock was one of the pioneers of ESG investing, so its recent abandonment of “woke” policies is the biggest sign yet that the vibe has shifted against liberal activism in the private sector. According to the Wall Street Journal:
When BlackRock joined a U.N.-sponsored climate coalition in March 2021, sustainability groups were thrilled.
Having the world’s largest investment firm on board instantly lent credibility to the Net Zero Asset Managers, an initiative committed to support the goal of net-zero greenhouse gas emissions by 2050. Dozens of major investment managers followed BlackRock’s lead.
“BlackRock is proud to put its name behind this initiative,” Chief Executive Larry Fink (pictured above) said at the time.
Nearly four years later, Fink was distancing himself. NZAM got a phone call on Jan. 9: BlackRock was out. Within days, the coalition was teetering.
BlackRock’s departure from the coalition and its reversal this week on several diversity, equity and inclusion policies are the latest examples of the company’s retreat from advocating for issues related to environmental, social and corporate-governance factors.
It has been gradually walking back its ESG initiatives for years after conservatives criticized the movement as being “woke” and legal risks grew. BlackRock’s recent actions show the reversal is almost complete, though the fallout might not be. The company has been able to maintain strong results throughout the controversy, reporting record inflows last year.
BlackRock’s actions indicate a wider reevaluation within the investment industry. Without the backing of major asset managers, support for shareholder resolutions addressing climate change, human rights, and DEI has significantly declined. In 2024, only 1.4% of 279 such resolutions passed, a sharp decrease from more than 20% in 2021. The likes of BlackRock, Vanguard, Fidelity Investments, and State Street, have been identified as “the worst performers” in supporting these proposals.
NLPC pressured Blackrock early to abandon its woke investment policies. The firm’s ESG retreat is another example of successful corporate activism.
