Activist investor calls for BlackRock CEO Fink to step down over ESG ‘hypocrisy’

Larry Fink, Chairman and C.E.O. of BlackRock arrives on the DealBook Summit in New York City, November 30, 2022.

David Dee Delgado | Reuters

LONDON — BlackRock CEO Larry Fink is dealing with calls to step down from activist investor Bluebell Capital over the company’s alleged “hypocrisy” on its environmental, social and governance (ESG) messaging.

Fink has turn into an outspoken proponent of “stakeholder capitalism” and in his annual letter to CEOs earlier this year, pushed again towards accusations that the enormous asset supervisor was utilizing its dimension to push a political agenda.

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However, in a letter to Fink dated Nov. 10, shareholder Bluebell expressed concern in regards to the “reputational risk (including greenwashing risk) to which BlackRock under the leadership of Larry Fink have unreasonably exposed the company.”

In a press release despatched to CNBC on Wednesday, BlackRock responded: “In the past 18 months, Bluebell has waged a number of campaigns to promote their climate and governance agenda.”

“BlackRock Investment Stewardship did not support their campaigns as we did not consider them to be in the best economic interests of our clients,” it mentioned.

Why activist investor Bluebell Capital is targeting BlackRock over 'ESG hypocrisy'

London-based Bluebell — an activist fund with round $250 million in belongings underneath administration that holds a tiny stake in BlackRock — has beforehand focused the likes of Richemont and Solvay, and had a hand in efficiently forcing a administration restructure at Danone.

Partner and co-founder Giuseppe Bivona advised CNBC Wednesday that the agency was involved about “the gap between what BlackRock consistently says on ESG and what they actually do,” primarily based on Bluebell’s encounters with the Wall Street big throughout activist campaigns directed at these firms.

“We see BlackRock endorsing a number of bad practices from a governance, social and environmental perspective which is not actually in tune with what they say,” Bivona mentioned.

“In our latest activist campaign at Richemont, they have been opposing the increase of board representation for investors owning 90% of the company from one to three. I really don’t think this is in the best interest of the investor, upon which on a fiduciary basis they invest the money, and of course it’s not in the best interest of any shareholder.”

Bivona additionally took intention at BlackRock’s 2020 promise to purchasers to exit thermal coal investments, which it says in its consumer letter on sustainability that the “long-term economic or investment rationale” now not justifies.

Bluebell famous that this commitment excludes passive funds such as index trackers and ETFs, which represent 64% of BlackRock’s greater than $10 trillion in belongings underneath administration.

The company stays a significant shareholder within the likes of Glencore and “coal intensive miners” Exxaro, Peabody and Whitehaven, Bivaro’s letter to Fink on Nov. 10 famous. A report earlier this year discovered that big world asset managers together with BlackRock had been nonetheless pumping tens of billions of {dollars} into new coal initiatives and main oil and fuel firms.

BlackRock touts firm's voting choice program in response to ESG critics

“Let me say that when the price of coal was around $76 per ton, BlackRock was talking about essentially divesting,” Bivona advised CNBC.

“Now that the price of coal is $380 per ton, they are talking about responsible ownership. I think there is a high correlation between BlackRock’s strategy on coal and the price of coal.”

Bluebell’s letter additionally took intention at BlackRock for having “politicized the ESG debate,” after its public advocacy led to a swathe of Republican-controlled U.S. states divesting belongings managed by BlackRock in protest on the asset supervisor’s ESG insurance policies.

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