![]() One of the best and most nuanced critiques of ESG has come from Stuart Kirk, who lost his job as head of responsible investment at HSBC Asset Management after raising doubts about the efficacy of the approach. Greg Abbot, his counterpart in Texas has pledged to “discriminate back against those discriminating against our oil and gas firms,” adding: “BlackRock is blackballed in Texas.” “Is national defence not ethical? How is the Swedish defence industry financed - by Martians?”īut it is, of course, in the US where the investment culture wars are fiercest.įlorida governor Ron DeSantis recently pulled $2bn of state assets from BlackRock in protest over its brand of stakeholder capitalism. “I got so angry,” said Artis Pabriks in an interview with the Financial Times. Last year, as Russian troops were massing on the Ukrainian border, the Latvian deputy prime minister publicly vented spleen at a Swedish bank that had refused to lend money to one of his country’s defence companies because of “ethical standards”. However, it was the attempt to impose moral certainty where none existed that left the investment community most exposed to a backlash. Last year, the chief executive of a Deutsche Bank subsidiary had to resign after the authorities raided the company’s offices in connection with “greenwashing” allegations. It doesn’t help that there’s plenty of ESG snake oil around. ![]() In a perfect world you’d rather there was no need for arms manufacturers in an imperfect world supplying weapons to a country defending itself against an illegal invasion has become a moral imperative. He has been given cover by the fact that the first war in Europe for 80 years has messed up established thinking by creating an energy crunch and rampant inflation, thereby introducing some shades of grey to the sustainable investment debate.Ĭlimate change and clean tech may very well create risks and present opportunities but there is now a broad acknowledgement that European hydrocarbons are less problematic than Gulf hydrocarbons and much less problematic than Russian hydrocarbons. Sawan appears to have abandoned the near-impossible attempt to thread the needle. Sawan’s predecessor Ben van Beurden often complained that however much money he invested in green technologies half of his shareholders would complain it was too much and half would complain it was too little. This has been widely interpreted as meaning Shell will be focusing more on oil and gas and less on wind and solar. ![]() Wael Sawan, Shell’s newish chief executive recently said his company “will invest in the models that work - those with the highest returns that play to our strengths”. ![]() Much of the past outperformance of ESG funds now appears to be a product of the investment style skewing towards big technology companies which, until recently, were booming but have sharply fallen in value as interest rates picked up.Īnd the ability of investors to push for change has also taken a hit. But the naysayers have started to find their voice of late. This could broadly be taken as the prevailing orthodoxy three years ago. He warned there would be a rapid shift of money from polluting industries to clean alternatives and outlined how BlackRock would avoid investing in unsustainable companies. The 2020 edition of his widely read and much-discussed annual letter to chief executives was typical. Over an 18-month period in the wake of the financial crisis, Timothy Geithner, then US Treasury secretary, reportedly phoned Fink nearly 50 times – outnumbering all of his calls and meetings with the heads of the six largest US banks combined.īlackRock is the biggest fund firm in the world with a cool $10 trillion in assets under management.Īnd Fink has not been afraid to flex that financial muscle in the past. There are few more influential captains of industry or titans of finance than the long-standing boss of BlackRock. As a potential indicator we may have passed “peak ESG”, it’s hard to ignore.Ĭertainly, if Fink is confused then you know there’s a problem. He went on to tell an audience at the Aspen Ideas Festival on Sunday that he’s “ashamed” to be part of the debate on the issue – before backtracking and saying he’s not. ![]() The chief executive of US fund management company BlackRock, who could quite plausibly be described as the godfather of “ESG” (environment, social and governance) investing, said he was no longer going to use the term because it is being politically “weaponised”. Larry Fink would do well to book an appointment with his chiropractor to help undo the knots he tied himself in over the weekend. ![]()
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