In a Wall Street Journal op-ed titled “BlackRock’s Climate-Crusade Doubletalk,” entrepreneur Vivek Ramaswamy takes aim at BlackRock CEO Larry Fink’s annual letter urging corporate leaders to put their companies’ “purpose” as the “foundation” of their relationship with their stakeholders while also pursuing a climate change agenda favored by BlackRock.
Ramaswamy, the author Woke, Inc.: Inside Corporate America’s Social Justice Scam, writes that Fink “claims he wants CEOs to stay true to the purposes of the companies they run, while also demanding that they advance the corporate purposes that BlackRock favors. He can’t have it both ways.”
Ramaswamy offers clear examples of how a company’s primary “purpose” can be wildly at odds with the agenda of its major shareholders when BlackRock is the shareholder. He writes:
Take Exxon Mobil. In 2018 the company’s guiding principle was clear: “Exxon Mobil Corporation is committed to being the world’s premier petroleum and petrochemical company.” The company stated that its first responsibility was to make money for shareholders.
Then last year a little-known investment firm called Engine No. 1, which held a 0.02% stake in Exxon, won three seats on Exxon’s 12-member board. Engine No. 1 waged an activist campaign claiming that Exxon should reduce its carbon emissions and become a global leader in profitable clean-energy production. BlackRock, Exxon’s second-largest shareholder, voted for three of Engine No. 1’s climate-focused board candidates. BlackRock claimed that its vote was motivated by concern over Exxon’s lack of a clear climate-change strategy. Every savvy market participant at the time knew that Engine No. 1’s proxy battle would end wherever BlackRock cast its die. Few knew that Engine No. 1 CEO Jennifer Grancio had been a managing director at BlackRock from 1999 to 2018.
The world’s most influential impact investor had its desired impact. Before the proxy battle, Exxon had planned to increase oil and gas production by 25% over the next five years. After the proxy battle, Exxon plans to keep oil output at the lowest level in two decades, a 20% decline from prior forecasts. More recently, it pledged net-zero global emissions in its own operations by 2050. Exxon Mobil once had a clear purpose, but BlackRock didn’t want the American oil-and-gas company to be “guided” by it. BlackRock wanted the company to change it. And that’s what Exxon did.
Ramaswamy notes that this same problem is confronting Royal Dutch Shell, which also has BlackRock as its largest shareholder.
Fink’s annual letter stresses that BlackRock isn’t trying to foist its climate crusade on companies; it is merely encouraging its portfolio companies to move in the direction of a zero emissions future because that is the direction the world is moving. But Ramaswamy calls this a circular argument – because the world is moving in this direction thanks to BlackRock, as the world’s largest asset manager, pushing it there. Not only does BlackRock have $10 trillion in assets under its management, it also has BlackRock alums in key positions in the Biden administration advancing the green agenda. Thus, Ramaswamy argues, Fink’s “claim that he is merely responding to the ‘transition to a net zero world’ obscures his own firm’s role in catalyzing that transition.”
Ramaswamy concludes that Fink “should be honest about whether he wants BlackRock’s portfolio companies to pursue their own corporate purposes or the purposes that BlackRock favors.”
Rebecca Mansour is Senior Editor-at-Large for Breitbart News. Follow her on Twitter at @RAMansour.