Edited by: Fern Sidman

One of the most powerful and influential American multi-national investment companies today is a firm known as Blackrock. Based in New York City and founded in 1988, BlackRock is the world’s largest asset manager, with $10 trillion in assets under management as of January 2022. BlackRock operates globally with 70 offices in 30 countries, and clients in 100 countries. Along with Vanguard and State Street, BlackRock is considered to be one of the Big Three index fund managers that dominate America.

Having said this, Blackrock, which was founded by Larry Fink and others,  has sought to position itself as an industry leader in environmental, social and corporate governance (ESG). The company, however, has faced criticism for worsening climate change, its close ties with the Federal Reserve System during the COVID-19 pandemic, anticompetitive behavior, and its unprecedented investments in China, as was reported by Wikipedia.

According to a previously published report in The Economist, Blackrock’s head honcho, Larry Fink, who was at one time feted for “democratizing” access to investment, has received stinging missives from Republicans and Democrats alike. They have accused BlackRock, under Fink’s leadership of selling its customers short by pursuing an “activist” agenda on climate change.

There is no doubt that America’s culture wars over the questionable woke agenda have played a pivotal role in Blackrock’s policy decisions. According to those with knowledge on the matter, the Blackrock board of directors thoroughly vets companies before even considering them as an investment possibility. Sources say that the doctrine at Blackrock is that a company has to prove itself as a company that is involved in the promotion and support of woke causes, whatever they may be. The Economist reported that BlackRock is a big seller of investment products that consider environmental, social and governance (ESG) factors alongside financial ones. It acts as a quasi-regulator in pushing companies to disclose their climate risks. That appeals to many clients. But in a politically divided country, it alienates others.

According to sources, however, who spoke to “On the Money” and reported on by the New York Post,  Fink is trying to make a fresh push to repair relationships with conservatives in Washington.

The money-management kingpin has been ordering up BlackRock ads on Fox News, sending executives to DC to meet with GOP lawmakers, and is making plans to donate more money to Republicans in the next election cycle, according to sources close to the firm, as was reported by the Post.

The shift comes as Fink has roused the ire of multiple state attorneys general and, more recently, Florida Gov. Ron DeSantis over so-called ESG investments that promote environmental, social and governance reforms.

GOP lawmakers have threatened to investigate whether or not the group’s ties to various climate groups and ESG objectives conflict with its fiduciary responsibilities, the Post reported. In response, BlackRock has been scrambling to meet with representatives from Senate Banking, House Judiciary and House Financial Services, sources said.

“BlackRock knows they have a DC Republican problem,” one GOP Hill source told The Post. “They should be worried — investigations lead to potential legislation and regulation and bad news cycles.”

A Blackrock rep emphasized the company is focused on “educating” people and pointed to a recently created web page, “BlackRock setting the record straight,” the Post reported. “As a fiduciary, we have an obligation to act in the best interest of our clients and to be solely focused on their investment objectives,” according to the web page. “Our clients’ interests come first. Always.”

At the beginning of December 2022, it was reported in the New York Post that Florida said that it had begun to divest $2 billion in funds overseen by BlackRock. This was interpreted as a sharp rebuke of the giant asset manager’s investing policies under CEO Larry Fink that right-leaning critics have blasted as “woke capitalism.”

The divestment under Gov. Ron DeSantis – the largest of its kind by an individual state – is the latest sign of mounting unrest among Republican policymakers over so-called “ESG,” or environmental, social and corporate governance practices, the Post reported.

Florida’s chief financial officer, Jimmy Patronis, accused BlackRock of attempting to “use their power to influence societal outcomes.”

“Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” Patronis said, as was reported by the Post. “It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do. “

“Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns,” he added.

The Post also reported that Florida’s state treasury has removed BlackRock as manager of roughly $600 million in short-term investments and have its custody bank freeze about $1.43 billion in long-term securities. The decision was first reported by Reuters.

Florida joined other Republican-led states, including Louisiana and Missouri, who have pulled state funds from BlackRock’s control in response to concerns about ESG. The Post reported that in a statement, BlackRock said that it was “surprised” by Florida’s decision to divest.

“As a fiduciary, everything we do is with the sole goal of driving returns for our clients. We are surprised by the Florida CFO’s decision given the strong returns BlackRock has delivered to Florida taxpayers over the last five years,” the company said, as was reported by the Post.

“Neither the CFO nor his staff have raised any performance concerns. We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics,” the company added.

The Post also reported that n August 2022, DeSantis – a frequent critic of so-called “woke” corporations – revealed that state pension funds could no longer consider ESG standards when making investments for retirees.

Florida’s three-member state Board of Administration, which is chaired by DeSantis, passed a resolution requiring fund managers to make use of state resources in a way that “prioritizes the highest return on investment” while bypassing the “ideological agenda” of ESG.

“Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity,” DeSantis said in a statement at the time, as was reported by the Post.

Fink has drawn scrutiny from Republican lawmakers due to his public embrace of “stakeholder capitalism” as an investment strategy.

The Post reported that the BlackRock boss defended his stance in an open letter to investors last January, declaring that stakeholder capitalism is “not about politics.”

“It is not a social or ideological agenda. It is not ‘woke,’” Fink wrote in the letter, the Post reported. “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.”

During an interview on CNBC’s “Squawk Box” in May 2022, Texas Senator Ted Cruz shot back at Fink’s assertion of the power of capitalism. Cruz said,”that is not capitalism, that is abusing the market.”

Cruz challenged Fink’s so-called “woke” investment decisions and suggested money managers like him be barred from voting on behalf of other investors “to advance their own political interests,” as was reported on the CNBC web site.

Cruz also claimed that Fink and his contemporaries have moved away from focusing on increasing profits for shareholders to taking stances on social issues like climate change to curry favor with wealthy liberals.

CNBC also reported that Fink highlighted climate change as a problem facing corporations in a 2020 letter to CEOs of the companies BlackRock has invested in. “Climate change has become a defining factor in companies’ long-term prospects,” Fink wrote. “I believe we are on the edge of a fundamental reshaping of finance.”

Cruz also invoked what he called Fink’s support of ESG — environmental, social and governance issues — in various shareholder votes, as was reported by CNBC.

“Does Wall Street also bear some of the responsibility? Absolutely,” Cruz said, referring to the average price for regular unleaded gasoline topping $4.59 per gallon.

“There’s a Larry Fink surcharge, every time you fill up your tank, you can thank Larry for the massive and inappropriate ESG pressure,” Cruz said in May 2022.

He later said, “What Larry Fink is doing has been unprecedented, in the rise of ESG.”