Republicans accused BlackRock of being too ‘woke’ on climate change. Activists say the firm isn’t woke enough

September 14, 2022, 11:13 AM UTC
Last month 19 Republican attorneys-general accused Blackrock of boycotting energy funds.
David A.Grogan—CNBC/NBCU Photo Bank/NBCUniversal/Getty Images

BlackRock recently found itself in a uniquely uncomfortable position over its ESG practices, a position I’m struggling to not describe as being caught between a rock and a hard place.

On one side, Republican legislators are denouncing the company for engaging in “woke capitalism.” Last month, shortly after Texas comptroller Glenn Hegar publicly accused BlackRock of “boycotting” energy companies, 19 Republican state attorneys-general sent a letter to the asset manager accusing it of “sacrific[ing]” their state pension funds for the sake of the manager’s “climate agenda.”

BlackRock responded to the allegation last week in a 10-page letter of its own, dismissing the charge as “inaccurate” and stating that the fund’s approach to ESG investing is “entirely consistent” with its duty to maximize investor returns. 

But by rebuffing the Republican flank, BlackRock is unwittingly providing fuel for climate campaigners on the other side of this public-opinion pincer, who accuse BlackRock of flaking on its commitment to fight climate inaction and question whether “ESG” is just greenwash.

BlackRock does not boycott energy companies or any other sector or industry,” the company writes in its letter, noting that it holds $170 billion worth of assets in energy companies—mostly fossil fuels. Many campaigners would rather BlackRock divest from (or boycott) fossil fuel industries rather than keep such a substantial stake in them.

I don’t share that sentiment but, if BlackRock won’t divest, it should use its shareholder status to affect change. Yet data on proxy votes show the asset manager has opposed more shareholder motions on climate change this year than last.

In its letter, BlackRock says it is opposing more votes because they are “unduly prescriptive. The asset manager has objected to the SEC’s recent proposed regulations on corporate climate disclosure, too, on the same grounds. 

Pro-small-government Republicans should be happy with BlackRock’s opposition to SEC regulation, but campaigners who want to see climate-conscious investment live up to its promise shouldn’t be. One of the many problems with “ESG funds” is that the market has no unifying, regulatory oversight to ensure that any money-pot claiming to be full of green assets actually is. Tighter SEC regulation would provide standardization.

BlackRock isn’t the only asset manager struggling to prove that it is simultaneously doing enough and also not doing too much to tackle climate change, but it was the only U.S. institution called out by the Texas comptroller in August, which put it in the firing line of the Republican attorneys general.

Yet if more Republican states join the ranks of Florida and West Virginia in banning pension funds from investing in BlackRock as a reaction against “woke capitalism,” my bet is that future pensioners will feel that loss more than the executives at the $8 trillion asset manager will.

Eamon Barrett

P.S. The debate over what ESG means and whether it’s a useful acronym at all will no doubt be a key topic at Fortune’s Global Sustainability Forum later this month, convening virtually on Sept. 29. The theme of the conference is How to Reach Net-Zero: Transitioning from Ambition to Action.

If you’d like to attend the conference—where former Vice President Al Gore, Rolls-Royce CEO Warren East, and HP CEO Enrique Lores will all be speaking—you can apply online here.


Australia won’t ban coal

Australia passed its Climate Change Bill legislation last week, enshrining a pledge to cut carbon emissions 43% by 2030 and to achieve net zero emissions by 2050. Down Under is one of the world’s largest polluters per capita and counts mining and agriculture as the economy’s key contributors. However the bill, formulated by the ruling Labor government, makes no pledge to ban future coal and gas projects, which critics say makes the targets of the bill unobtainable. BBC

The U.K. caps energy costs

The U.K.’s new prime minister, Liz Truss, unveiled a scheme to stop rising energy prices in the country from jumping 80% in winter, after a previous government-mandated cap expires. The $150 billion scheme will limit average household energy bills to £2,500 ($2,874) per year, but the government bundled the initiative with a plan to increase fracking and gas exploration—policies that have little public support. Financial Times 

Banks have a new watchdog

The U.S. banking regulator, the office of the Comptroller of the Currency (OCC), announced the appointment of its first ever chief climate change officer, Yue (Nina) Chen, on Monday. Chen, who studied chemical engineering at MIT, previously served as the head of the climate division at New York’s financial regulator, topping a career spent on Wall Street and the Nature Conservancy. Under the OCC, Chen will be tasked with assessing and developing means to monitor climate risks to banks. New York Times

Who wants a home that floods?

Home buyers are less likely to buy flood-prone houses if they’re made aware of the risk, U.S. real estate agent Redfin found through an experiment in collaboration with climate non-profit First Street Foundation. First Street provided data ranking the likelihood that a house would flood any time in the next 30 years, assigning each property a score. Redfin customers shown those flood risk scores quickly began viewing properties with significantly less risk—decreasing their risk tolerance up to 54%. But, with potential flood zones expanding to put 15 million homes at risk, is it likely real estate agents will volunteer this information? Bloomberg


FEMA director admits America’s flood maps are useless because of climate change by Chris Morris

The world is hurtling toward ‘dangerous’ climate tipping points much earlier than once thought, new study finds by Tristan Bove

I survived the worst ESG backlash since the term was invented. Today’s ESG critics are running out of ammunition by Halla Tómasdóttir

Google has one of Big Tech’s most aggressive sustainability plans. Here’s its 3-step playbook for helping the planet by Matt Whittaker

A DARPA grant inspired MIT scientists to build a desalinator the size of a briefcase that turns seawater into drinking water by Ian Mount

The UN is warning that climate change impacts are entering ‘uncharted territories of destruction’ by Tristan Bove



Solar power generation across the EU hit a record high over the summer months, as gas, nuclear, and hydropower all suffered during the energy crisis (gas deliveries were disrupted by the war in Ukraine; nuclear and hydropower were crimped by extreme heat depleting water resources). From May through September, solar power generated 12% of the EU’s electric needs, up from 9% last year. The increase in solar generation was partly due to falling volumes of alternative energy, but also a result of increased installations of solar farms across the continent. According to the International Renewable Energy Agency, solar capacity expands roughly 15% each year in the EU.

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