Wednesday, during an appearance on Fox Business Network’s “The Claman Connection,” BlackRock CEO Larry Fink griped about how the term “ESG,” which stands for environmental, social, and corporate governance, had been “weaponized.”
Fink touted his belief that “decarbonization technology” was needed but said he no longer used the term “ESG” because of its political connotations.
Partial transcript as follows:
CLAMAN: Well, some of that has to do with what you have been behind for many years, and that’s ESG, environmental, social, and governance.
FINK: Right.
GASPARINO: We can say those words, right?
FINK: Oh, I don’t say them anymore.
(LAUGHTER)
CLAMAN: My God.
GASPARINO: We won’t go there.
(LAUGHTER)
CLAMAN: Larry, much of the nation is broiling hot right now.
FINK: Yes.
CLAMAN: We can throw up a weather map, and it is pretty unbelievable. A lot of records have been broken, particularly in the Southwest.
FINK: Yes.
CLAMAN: Texas is melting records. The town of Tahoka broke a 110-year-old record. It’s been nuts. They hit 116 degrees.
Last week, the state hit a new record for electricity demand.
FINK: Yes.
CLAMAN: But what’s interesting is, much of that demand, as conditioners are running at full speed, comes from sustainable.
FINK: Yes.
CLAMAN: So whether that’s solar or wind.
FINK: Yes, wind. Yes.
CLAMAN: It’s filling that demand. And yet the state of Texas doesn’t like you guys.
FINK: No, look, Texas is — but people don’t understand, Texas is the number one state now in renewables. It is also obviously the largest state in terms of traditional energy, traditional power.
And so we look at this that we need power in both traditionals and renewables. And we’re going to be announcing a big transaction with a traditional energy company that’s heavily into gas, and we’re helping them move towards more sequestration. And so our job is to be working on behalf of our — the asset owners.
I mean, we’re the last — the largest asset manager. That means none of the money is ours. We’re working with all the asset owners and trying to help them on long-term solutions. And part of the long-term solution is working on decarbonization. And, hopefully, we can develop new technology to bring down the cost even more.
CLAMAN: But let’s be clear, Charlie, and you have seen this. BlackRock has hundreds of funds with fossil fuel companies.
FINK: Totally.
GASPARINO: Two hundred billion, right? is that the number?
CLAMAN: We can put up a bunch of them right now.
FINK: No, no, no, we’re more than that.
I think, worldwide, over $380 billion.
CLAMAN: Correct, $380 billion.
(CROSSTALK)
GASPARINO: That’s amazing. That’s amazing.
CLAMAN: And it’s something like…
FINK: We’re the largest…
CLAMAN: … 500 of your funds have at least one or two names within them.
GASPARINO: You’re the largest sin stock investor in the world.
FINK: Well, I wouldn’t call it sin stocks.
(LAUGHTER)
FINK: We have to rely on traditional energy.
GASPARINO: Right.
FINK: At the same time, we need to aggressively build decarbonization technology to offset the demand.
But that’s going to take years and years and years and years and — and so the question is, do we have the time? You’re talking about record heat. The thing that I focus on and that we’re not spending enough time on is what’s going on in homeowners insurance.
In the state of Florida and the state of Texas, the state of California, major, major property and casualty companies, big brands are leaving the states because they can’t elevate the price to meet their returns on homeowners. And we’re displacing really a large segment of America today that are not going to be able to afford homeowners insurance if they are in an area of risk.
To me, that’s where climate is investment risk. And that’s what I wrote about. Our…
CLAMAN: So, why not say ESG anymore?
FINK: Because it’s been weaponized by the far left and weaponized by the far right, and it — we lose the conversation.
GASPARINO: Maybe go to GSE.
(LAUGHTER)
GASPARINO: I can’t help but laugh about this, because it sounds so — the attacks on you are kind of absurd, because I see Texas coming after you on ESG.
I see Republicans. I see that guy from New York, Lander, Brad Lander, the comptroller of New York.
FINK: Attacking us on not doing enough.
GASPARINO: Not doing enough. We want you to get out of all of it and say, I can’t do that.
(CROSSTALK)
FINK: And we can’t — we can’t — look, our job is to do what our clients are asking them to do, and we do a very good job.
And despite all the narrative, last year, we were awarded over $400 billion in net new assets.
Follow Jeff Poor on Twitter @jeff_poor