“China will be one of the biggest opportunities.”
These words, uttered in 2020 during the pandemic, are not mine. They belong to BlackRock CEO Larry Fink – and were made to indicate where he saw the future of the company's investments developing.
Notably, the China alliance with BlackRock was entirely left out of the recent Washington Post story by environmental reporter Steven Mufson (this is only ironic in part because China is one of the worst polluters in the world.)
No doubt there are pro-ESG companies, and banks, who have built their business model on woke policies, SVB being a prime example. For all the pro-ESG happy talk, however, the rats are hopping off the ship.
Morningstar said most sustainable funds underperformed their counterparts in 2022. Why? Because energy did so well. The Financial Times also reported $6.2 billion in capital exited ESG funds in the last quarter of 2022; they labeled the move “brutal.” Mufson’s second problem is that for being big on the environment, he doesn’t seem to get that BlackRock is willing to cannibalize the “E-environment” and the “G-governance” to be friends with China – whose communist regime is building coal plants left and right.
As it has been reported publicly, Consumers’ Research executive director Will Hild recently sent a letter to 10 states including Florida to raise awareness of the fact that BlackRock continues to take state pension funds and invest them in China.
The Hild letter said: “Chinese firms are not held to the same transparency standards as their Western counterparts, so foreign investors are often hard pressed to appreciate the true risk profile of what they’re investing in.” That is a huge red flag to me, someone who takes the obligation to our pension fund investments seriously.
BlackRock’s China connection was one of the reasons, along with BlackRock CEO Larry Fink’s outspoken woke ideology campaign, that I was proud to stand by Governor Ron DeSantis when we banned the use of ESG in the state’s pension system. My office also divested $2 billion from BlackRock who was managing cash for the Florida Treasury. Ultimately, the returns weren’t there.
Maybe the Post’s Mufson should have had a financial reporter do this story instead – because the numbers for BlackRock show it is a bad bet all around. While Mufson said he was seeing a “backlash” coming and “cracks” appearing within the conservative movement against ESG investments funded by taxpayer money, BlackRock’s problems are also that they were yielding lower performance.
When my team researched how BlackRock performed for Florida compared to other funds, we saw that the company was performing at a lower level of return on investment. Perhaps it was their alliance with China (has Mufson ever researched their pollution record?) and fixation on woke investment criteria had made them drift from their core mission? Regardless, BlackRock’s performance was not even examined in the Mufson piece.
My job as Florida’s Chief Financial Officer is to protect the state investments for the people of our state. Maybe Larry Fink wants to invest in social engineering and cultural wokeism, but he should do that on his own dime.
Here’s a thing that even liberal activist-reporters could find a way to be honest about:
Fink’s investments in China certainly aren’t addressing climate change; and his work in Florida was not strong enough to keep the State’s business. Maybe the next BlackRock CEO will be more results-oriented and less focused on radical social engineering.
