Larry Fink, Chairman and C.E.O. of BlackRock arrives on the DealBook Summit in Recent York City, November 30, 2022.
David Dee Delgado | Reuters
LONDON — BlackRock CEO Larry Fink is facing calls to step down from activist investor Bluebell Capital over the corporate’s alleged “hypocrisy” on its environmental, social and governance (ESG) messaging.
Fink has grow to be an outspoken proponent of “stakeholder capitalism” and in his annual letter to CEOs earlier this 12 months, pushed back against accusations that the enormous asset manager was using its size to push a political agenda.
Nevertheless, in a letter to Fink dated Nov. 10, shareholder Bluebell expressed concern in regards to the “reputational risk (including greenwashing risk) to which BlackRock under the leadership of Larry Fink have unreasonably exposed the corporate.”
In an announcement sent to CNBC on Wednesday, BlackRock responded: “Prior to now 18 months, Bluebell has waged quite a lot of campaigns to advertise their climate and governance agenda.”
“BlackRock Investment Stewardship didn’t support their campaigns as we didn’t consider them to be in the very best economic interests of our clients,” it said.
London-based Bluebell — an activist fund with around $250 million in assets under management that holds a tiny stake in BlackRock — has previously targeted the likes of Richemont and Solvay, and had a hand in successfully forcing a management restructure at Danone.
Partner and co-founder Giuseppe Bivona told CNBC Wednesday that the firm was concerned about “the gap between what BlackRock consistently says on ESG and what they really do,” based on Bluebell’s encounters with the Wall Street giant during activist campaigns directed at these corporations.
“We see BlackRock endorsing quite a lot of bad practices from a governance, social and environmental perspective which just isn’t actually in tune with what they are saying,” Bivona said.
“In our latest activist campaign at Richemont, they’ve been opposing the rise of board representation for investors owning 90% of the corporate from one to 3. I actually don’t think that is in the very best interest of the investor, upon which on a fiduciary basis they invest the cash, and in fact it is not in the very best interest of any shareholder.”
Bivona also took aim at BlackRock’s 2020 promise to clients to exit thermal coal investments, which it says in its client letter on sustainability that the “long-term economic or investment rationale” not justifies.
Bluebell noted that this commitment excludes passive funds comparable to index trackers and ETFs, which constitute 64% of BlackRock’s greater than $10 trillion in assets under management.
The corporate stays a significant shareholder within the likes of Glencore and “coal intensive miners” Exxaro, Peabody and Whitehaven, Bivaro’s letter to Fink on Nov. 10 noted. A report earlier this 12 months found that enormous global asset managers including BlackRock were still pumping tens of billions of dollars into recent coal projects and major oil and gas corporations.
“Let me say that when the worth of coal was around $76 per ton, BlackRock was talking about essentially divesting,” Bivona told CNBC.
“Now that the worth of coal is $380 per ton, they’re talking about responsible ownership. I believe there may be a high correlation between BlackRock’s strategy on coal and the worth of coal.”
Bluebell’s letter also took aim at BlackRock for having “politicized the ESG debate,” after its public advocacy led to a swathe of Republican-controlled U.S. states divesting assets managed by BlackRock in protest on the asset manager’s ESG policies.
