BlackRock is on the receiving end of some serious blowback from conservative states across the US, and their CEO Larry Fink has admitted that they’ve faced some damage as a result. In early December of 2022, Florida, South Carolina, Louisiana, and Missouri all pulled their funds from BlackRock in response to what they perceived as the firm’s leftward tilt – a move that was spearheaded by Florida Governor Ron DeSantis.
“The tax dollars and proxy votes of the people of Florida will no longer be commandeered by Wall Street financial firms and used to implement policies through the board room that Floridians reject at the ballot box,” DeSantis stated. “We are reasserting the authority of republican governance over corporate dominance and we are prioritizing the financial security of the people of Florida over whimsical notions of a utopian tomorrow.”
In the Aspen Ideas Festival on Sunday, Fink conceded that DeSantis’ decision did indeed hurt his firm significantly, though he was still keen to emphasize his commitment to conscientious capitalism.
“I’m ashamed of being part of this conversation,” Fink said.
He said that his letters to investors were never meant to be a political statement, but when pressed he reversed his stance, declaring that he wasn’t ashamed and that he did indeed believe in the concept.
“I never said I was ashamed,” he said, incorrectly. “I’m not ashamed. I do believe in conscientious capitalism.”
BlackRock’s ‘woke’ positions have not only alienated conservative states, but have also been met with heated criticism from conservative pundits. DeSantis himself slammed the firm for using proxy votes to ‘implement policies through the boardroom that Floridians reject at the ballot box’. Louisiana state treasurer John Schroder argued that by endorsing ESG investing, BlackRock was ‘sacrific[ing] access to high-quality investments and thereby jeopardize[ing] returns’ and denying Louisianians the benefit of their own robust assets.
Ultimately, it looks like BlackRock’s efforts to become more socially responsible have not gone over well with conservatives, who view the firm’s moves as politically motivated rather than rooted in sound financial principles. Fink’s statements suggest that the firm will be sticking to its guns, for better or worse, but it remains to be seen whether enough of their investors are willing to overlook the backlash and stand by the firm in the face of such strong opposition. For now, it looks like the conservatives have won this battle.