Activist Investor Joins BlackRock’s ESG Critics

December 07, 2022

Activist investor Bluebell Capital Partners called out BlackRock Inc., accusing the asset manager of hypocrisy on its environment, social and governance stance and urging the firm to replace Chief Executive Officer Larry Fink in a letter sent to BlackRock’s board last month. 

BlackRock, whose subsidiary iShares is the largest ETF issuer in the U.S. and globally, has faced intensifying criticism over its ESG strategy in recent weeks. 

London-based Bluebell argued it wasn’t BlackRock’s “role to direct the public debate on climate and energy policies or to impose ideological beliefs on the corporate world” and called it a “source of ESG risk.” 

Bluebell also said it was “hypocritical” of BlackRock to promote ESG while continuing to invest in fossil fuels such as thermal coal. 

The firm, which has a history of taking on prominent companies such as Danone, Solvay and Richemont, holds less than a 0.01% stake in BlackRock. Bluebell shared a copy of the letter with ETF.com on Wednesday, while it did not immediately respond to a request for comment. 

BlackRock’s ESG funds such as the iShares ESG Aware MSCI USA ETF (ESGU) and the iShares ESG Aware MSCI EAFE ETF (ESGD) retreated by 16.89% and 12.76%, respectively, so far this year. All 33 of BlackRock’s ESG funds that were on the market at the start of 2022 are down so far this year, according to Bloomberg data.

Earlier this month, Florida announced it would divest $2 billion in assets managed by BlackRock due to its ESG policies. In October, the Republican-led states of Missouri and Louisiana pulled $500 million and $794 million, respectively, from the firm over ESG as well. 

The divestments came not long after 19 GOP attorneys penned a joint letter to BlackRock in August stating the asset manager was not doing its fiduciary duty when using “the hard-earned money of [the] states’ citizens” to forward its “climate agenda” and not prioritizing financial returns. 

“In the past 18 months, Bluebell has waged a number of campaigns to promote their climate and governance agenda,” a BlackRock spokesperson said in an emailed statement to ETF.com. “BlackRock Investment Stewardship did not support their campaigns as we did not consider them to be in the best economic interests of our clients.” 

 

Contact Zoya Mirza at [email protected] 

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