ESG stands for the environmental, social, and governance movement. That is just another name for the new green deal in the private sector.
That is where all of your investments must be in companies that toe the progressive line. It is not particularly a good move. In six months, BlackRock lost $1.7 trillion of its clients’ money. But, did they learn anything from that? Are you kidding? These are the Democrats, we are talking about here.
Conservative states are pulling all of their money from BlackRock while they still have some left. South Carolina is pulling their remaining $200 billion from the fund. This comes right after Louisiana announced they were withdrawing $794 billion.
Texas plans on going after BlackRock and nine other investment companies who have broken a Texas law that states by “refusing to deal with” or “terminating business activities with” companies involved in the production and use of fossil fuels “without an ordinary business purpose.”
BlackRock was downgraded by UBS analyst Brennan Hawken last week. The target price has gone from $700 to $585, according to a report from Barron’s.
Private investors are yanking out their money as well, opting for investment companies that try to protect their client’s money. BlackRock is hemorrhaging money as it is being withdrawn by its clients. Not to mention the huge losses it has taken by investing in ESG companies.
The downgrade was attributed to the fact that they are strictly adhering to ESG investment.
“We are downgrading BLK to Neutral based on environmental pressure to earnings and risk from the firm’s ESG positioning.”
BlackRock, which manages $8.5 trillion in client assets is investing strictly on ESG companies, while most investment houses are sticking with the tried and true method of investing where they can make a profit for their customers. It seems to me that BlackRock is not living up to its fiduciary responsibilities to its clients. Unless of course they explain to their clients what that means to their portfolio. I’m not convinced that they do that, but then again, I couldn’t swear they don’t.
BlackRock countered in a recent letter to state attorneys general, insisting that the officials falsely portray ESG as a departure from the maximization of profits and asserting that entities which assume a “forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes.”
At a recent panel event, BlackRock CEO Larry Fink and former President Bill Clinton discussed how ESG can aid governments in accelerating a transition toward renewable energy. “We’re seeing evidence every day that climate risk is investment risk,” Fink claimed, noting the movement of crop production as a purported result of heat and droughts. “People are waking up to that, and that’s created this tectonic shift.”
BlackRock is far from the only entity to suffer from ESG investments, which have underperformed over the past year largely as a result of overexposure to the technology sector and avoidance of fossil fuel investments. Harvard Management Company, the organization which oversees Harvard University’s endowment, posted a $2.3 billion loss in the past fiscal year and admitted that recent efforts to achieve net zero emissions through oil and gas divestment “weighed upon performance.”
A letter from Harvard Management Company CEO N.P. Narvekar said that his group is proud to be part of the ESG investment strategy employed by BlackRock. They are also concerned about racial and gender equality in investment companies. I would think the priority would be to get the best people.