BlackRock CEO Larry Fink praised the ESG movement and expressed concern about measures to strengthen supply chains at the World Economic Forum.
On Tuesday at the World Economic Forum in Davos, Switzerland, an official from an asset management company claimed that conflicts over ESG (environmental, social, and corporate governance) investing had stirred up a lot of debate.
I’m taking this incredibly seriously,” he told Bloomberg News to stress his seriousness. Please allow us to clarify specific points. Building a personal rapport with someone in business is far more complex. In addition, for the first time in my professional career, I am the target of personal attacks. They’re exaggerating the seriousness of the situation.
Just a few days after Elon Musk’s controversial social media post claiming that “the S in ESG stands for Satanic,” this allusion is made to the attempts to “demonize” the ESG movement. A “scam” that has been “weaponized by false social justice warriors,” as the business mogul put it, “is what this worldview is.”
Fink had to fly to Switzerland for a conference days after announcing the layoffs of hundreds of employees and the loss of $1.5 trillion in assets last year. BlackRock has taken a lot of flak from conservatives and libertarians who think the ESG movement is wrong for business because it promotes “leftist” goals like climate change and racial equality at the profit maximization price.
Fink added that the narrative creating this huge chasm is terrible. We’re doing all in our power to change the course of events.
Over the past year, Republican state treasurers have withdrawn almost $12 billion from BlackRock, citing unnecessary investment risks and political vendettas against their fossil fuel sectors as the reasons. The company oversees $8 trillion in assets, so the divestments are a negligible portion of that, but they reflect a general market wariness of ESG funds after a year of poor stock market performance.
Fink was one of the thousands of senior executives to attend the World Economic Forum, which encouraged more cooperation between government and business. During a panel discussion on the future of international trade, he elaborated on the theory.
While politicians grapple with the nation’s ballooning debt, Fink suggested, businesses should take the initiative in funding efforts to slow global warming.
Considering the reduced government’s ability to fund projects, he argued, “I believe there’s a greater need for governments to be engaged with the private sector, especially in infrastructure and decarbonization.” If private investors are confident in the project’s long-term profitability, they may be willing to provide funding.
Panel moderator and World Economic Forum president Borge Brenda lauded the Bipartisan Infrastructure Law and the Inflation Reduction Act as two examples of legislation advocated by the Biden administration to promote sustainable energy projects. Fink has said he’s “very optimistic” about the future of American decarbonization.
The chief executive also said that countries were splintering their international trade due to “national security” worries over the semiconductor and energy sectors.
He suggested that inflation may be attributed partly to fragmentation, although the phrase was sometimes overused in light of recent events like the conflict in Ukraine. Today, resilience training is a shared priority for firms of all sizes. If we strengthen our resistance, inflation will rise.
However, many contend that the growing integration of global supply networks in recent years has raised the likelihood of a worldwide economic meltdown. Lockdowns imposed by governments, particularly in China and other Asian countries, slowed the flow of consumer and industrial goods to developed markets. The impact on supply networks has been significant and continues to worsen.