BlackRock: Strong finance takes priority, ESG stands in the background.

TLDR:

BlackRock, the world’s largest asset manager, has been emphasising the importance of a company’s financial strength over its environmental, social and governance (ESG) metrics in company calls, according to an analysis by the Financial Times. The analysis found that in over 3,000 company meetings held by BlackRock up until September 2021, the term “financial strength” was used more than twice as often as “ESG”. The finding raises questions about BlackRock’s commitment to sustainable investing and whether it is effectively using its influence as a major shareholder to promote ESG considerations.

Key elements:

• BlackRock appears to be prioritising financial strength over ESG metrics in its engagement with companies, according to the Financial Times’ analysis of company calls.
• The analysis found that in over 3,000 company meetings held by BlackRock up until September 2021, the term “financial strength” was used more than twice as often as “ESG”.
• This emphasis on financial strength raises questions about BlackRock’s commitment to sustainable investing and whether it is using its influence as a major shareholder to promote ESG considerations.
• BlackRock has faced criticism in the past for its approach to sustainable investing, with some investors and environmentalists calling for the company to take a stronger stance on ESG issues.
• However, BlackRock has defended its approach, stating that it believes a company’s financial strength is a key driver of long-term value and that addressing climate change and ESG risks is essential to preserving financial strength.

BlackRock’s approach to sustainable investing has been a topic of debate for several years, with critics questioning whether the company’s actions match its rhetoric. The Financial Times’ analysis of company calls suggests that BlackRock may be prioritising financial strength over ESG considerations, despite its public statements about the importance of sustainability.

It remains to be seen how this analysis will impact BlackRock’s reputation and its position as a leader in the asset management industry. However, it highlights the ongoing tension between financial performance and sustainability and raises questions about whether asset managers are doing enough to promote ESG considerations in their engagement with companies.