Not quite three years ago, a few months after the release of my book The Dictatorship of Woke Capital, I sat down for an hour-long interview with Tucker Carlson for his “Tucker Carlson Today” show. Among other things, we discussed the role played in the rise of ESG (Environmental, Social, and Governance) investing by Larry Fink, the CEO of BlackRock, the largest asset management firm in the world. Fink was, at the time, the driving force behind ESG, the man who had taken it from a fringe investment strategy to a mainstream movement, the fastest-growing sector on Wall Street.
At that point, I shamelessly stole a line from one of my best friends in the resistance to ESG, Justin Danhof (now the Director of Corporate Governance for Strive Asset Management), saying, “Larry Fink wants to be famous. We need to help make that happen. We need to make him famous.”
To the surprise of no one who has ever worked with Justin, that strategy turned out to be brilliant. Three years on, and Fink is indeed quite famous—for ESG specifically—and he doesn’t appear to care much for his newfound fame. In many investment and policy circles, Fink’s name has become synonymous with the “politicization” of capital markets, the intentional manipulation of other people’s money to advance overtly political and only nominally investment-related ends. Because of his involvement in ESG and his aggressive focus on pushing “sustainability” on American corporations, Fink has become famous as an enemy of fossil fuels and an advocate for a “green” energy transition.
He doesn’t like that one bit.
About nine months ago, Fink began his public retreat from the idea he had made famous. Appearing at the Aspen Ideas Summit last June, Fink explicitly disavowed the use of the term ESG. “I don’t use the word ESG any more,” he said, “because it’s been entirely weaponized.” What he meant by that, of course, was that he didn’t like being associated with a term that had suddenly taken on a negative connotation. He didn’t like being famous as the guy who built ESG into a massive investment scheme.
Between then and now, Larry Fink has continued to attempt to roll back his and his firm’s reputation as the authorities on ESG, sustainability, and the post-fossil fuel business and investment environment. For the most part, he has done so in a low-key fashion, preferring not to remind people of his fame as he tries to undo it. Not quite two weeks ago, however, the proverbial dam broke, and Fink, apparently, felt compelled to get more aggressive.
On March 19, the Texas Permanent School Fund announced that it had informed BlackRock that it would be removing $8.5 billion from the firm’s management, citing a state law prohibiting the investment of public funds with financial institutions that intentionally harm the oil and gas industry. Aaron Kinsey, the Chairman of the Texas State Board of Education, declared that his office “has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office” and that “terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.”
Again, Larry Fink did not like that one bit.
BlackRock responded with a letter to Kinsey, denying that it is in violation of state law, and with an aggressive thread on Twitter/X, railing against Kinsey, the Texas law, and anyone who would dare to suggest that the firm is “anti-fossil fuels.”
The following week, Fink himself went out on the metaphorical campaign trail, visiting the financial networks for long, in-studio interviews, trying to shift focus away from his firm’s role in ESG. On Fox Business, Fink spoke almost exclusively about Bitcoin and his firm’s new, massively successful Bitcoin ETF. On CNBC, he talked about artificial intelligence (AI) and BlackRock’s efforts to advance the “democratization of information.” His message, in short, was that he and BlackRock are the good guys, making the world better for investors and everyone else—attempts by partisan hacks in Texas to paint them otherwise, notwithstanding.
On March 26, Fink released his much-anticipated annual letter to investors. It too sought to put distance between him and ESG/sustainability. This year’s document does not contain the phrase “ESG” even once, does not use the phrase “stakeholder capitalism,” and only uses the word “stakeholder” one time.
Perhaps most notably (although, admittedly, before the dam broke), earlier this month, BlackRock hired one of the best-known and most effective financial services lobbyists in Washington, Joe Wall. For the last 14 years, Wall has been the director of the Office of Government Affairs for Goldman Sachs, a firm that was once considered (as Matt Taibbi put it) a “great vampire squid wrapped around the face of humanity.” The fact that Goldman is no longer thought of in such highly negative terms is due, at least in part, to Wall’s effectiveness at rebranding the firm, softening and burnishing its image. He has, undoubtedly, been hired to do the same for BlackRock and its now-famous CEO.
John Kelly, Global Head of Corporate Affairs for BlackRock, said that the firm is “working to ‘expand coverage and deepen our impact’ with policymakers.” “As the role of the team and the needs of our clients continue to evolve,” Kelly said in an announcement, “we are committing even more focus and effort to engaging policymakers, particularly in the United States.”
Kelly didn’t put it this way, exactly, but what he meant was that Larry Fink is tired of being famous for all the wrong reasons and BlackRock is tired of being kicked around by Republican state and federal legislators who oppose the firm’s role in advancing the climate change/energy transition agenda. It is worth noting that, in addition to being well-liked and very good at his job, Joe Wall just happens to be a Republican, among other things, a one-time deputy assistant for legislative affairs to Vice President Dick Cheney. Wall will be invaluable to BlackRock as it tries to refresh its image, especially among its new chief lobbyist’s fellow partisans.
Larry Fink may still want to be famous, but not like this. He’s hoping that an all-out effort to change the firm’s public image will change his as well. Time will tell.