BlackRock and Its ESG ‘Voting Choice’ Ruse

This article originally appeared in Real Clear Markets on August 1, 2023

Amid growing criticism of its environmental, social and governance (ESG) investment  practices, BlackRock has announced that it will offer retail investors in its largest exchange-traded fund (ETF) the opportunity to participate in its “Voting Choice” program. Open to institutional clients since January 2022, this program allows investors to choose from a limited set of options to guide BlackRock in voting their shares. While perhaps an effective PR tool, Voting Choice is little more than a ruse that neither empowers investors nor diminishes BlackRock’s power to impose its ESG goals on American businesses.

BlackRock’s equity index has about $4.5 trillion in assets under management (AUM), empowering it to cast a whopping 10% of the shareholder votes for the entire S&P 500.  As BlackRock CEO Larry Fink has admitted, BlackRock uses that formidable power to “force behaviors” on the companies in which it invests.

For example, in his 2020 annual letter to CEOs, Fink stated that BlackRock would use both “disclosures” and “engagement” to ascertain whether companies had operating plans that assume the Paris Agreement’s climate goals are “fully realized.” He cautioned that in 2019, “BlackRock voted against or withheld votes from 4,800 directors at 2,700 different companies” and warned that it would be “increasingly disposed to vote against management and board directors” who failed to perform as instructed...

Read full op-ed in Real Clear Markets