BlackRock CEO Larry Fink said Sunday that he will not use the term “ESG,” which stands for environment, social and governance, anymore, citing the term’s political connotation, Axios reported.
“I’m ashamed of being part of this conversation,” Fink said in a discussion at the Aspen Ideas Festival on Sunday, according to Axios. ESG emphasizes green investing strategies to advance climate-focused efforts, such as net-zero emissions, according to a 2022 letter to CEOs by Fink.
“I’m not going to use the word ESG because it’s been misused by the far left and the far right,” Fink said, according to Axios.
BlackRock and Fink have been the subjects of critique from Republicans for their prioritization of “woke” investing, resulting in Republican-led states like Florida and Texas pulling money from the investment firm.
Despite continuing to advocate ESG investing strategies, Fink has attempted to moderate some of his public rhetoric following the backlash, and said companies like BlackRock are not supposed to be “environmental police” in his 2023 letter to investors.
“When I write these [investment] letters, it was never meant to be a political statement. … They were written to identify longterm issues to our longterm investors,” Fink told the crowd, Axios reported.
Republican-led states yanked nearly $4.5 billion from BlackRock in 2022 due to its ESG investing. Fink noted Florida’s move to withdraw $2 billion in assets damaged BlackRock, but emphasized 2022 was the firm’s best year with net inflows of $200 billion from American clients, according to Axios.
Further on in the conversation, Fink faced pressure about his comment about being “ashamed” and retracted it, Axios reported. “I never said I was ashamed,” he said. “I’m not ashamed. I do believe in conscientious capitalism.”
Louisiana and Missouri also removed $794 million and $500 million in pension funds from BlackRock in 2022, according to Reuters.
Alternatively, Democrats have argued the firm has not gone far enough with its ESG efforts. BlackRock’s board of directors recommended voting to oppose two proposals to go farther with its climate reporting at its yearly shareholder meeting in May.
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