Inside a conservative group’s war against BlackRock’s ESG investments

A conservative group known for targeting “woke capitalism” has launched a multimillion-dollar campaign attacking BlackRock and its CEO Larry Fink for “weaponizing” retirement funds with its push for more ESG investments, which promote environmental, social and governance responsibility.

Why it matters: The campaign by Consumers’ Research aligns with the posture of a growing faction of the GOP. House Republicans plan to make an assault on ESG a central part of their legislative and investigative agenda if they take back the majority in November’s midterms.

Between the lines: The crusade against ESG investments is something many conservatives feel deeply about — they view these companies as cultural enemies who are misusing investment funds to promote pro-climate policies.

• As a result, key GOP committees are already planning to haul in the CEOs of investment firms — like BlackRock — for public lashings if Republicans are in power come January, Hill sources tell Axios.

The anti-ESG sentiment is also spreading through Republican-run state and local governments.

• 19 state attorneys general, led by Arizona’s Mark Brnovich, recently wrote to the Securities and Exchange Commission asking the agency to look into BlackRock’s ties to China and whether it is prioritizing its fiduciary responsibility to investors.

Driving the news: Consumers’ Research’s latest campaign, out Wednesday, is a multi-pronged effort to raise awareness of BlackRock’s ESG efforts and paint them in a negative light.

• The group has circulated a “Consumer Warning” claiming BlackRock — the world’s largest asset manager — is using investors’ money to push a “radical agenda” that puts Americans’ retirement dollars “at risk in the name of progressive politics.”
• The warning was shared in a letter to the governors of states where inflation is hitting the hardest, including Colorado, Utah, Arizona, Nevada, Wyoming, Montana, New Mexico, Idaho, Alaska, Louisiana, Oklahoma and Texas. The letter recommends the states review their connections with BlackRock.
• Consumers’ Research launched a national television ad titled “BlackRock to Blame,” attacking the investment firm for allegedly contributing to rising inflation and gas prices.

What they’re saying: “BlackRock is using money that doesn’t belong to them to push an extreme agenda with no regard for American families who are paying the price,” Will Hild, executive director of Consumers’ Research, told Axios. “Consumers deserve to know where their investments are going.”

• “They claim that they’re pushing companies to prepare for climate change, but what they’re actually preparing them for is policy that BlackRock wants enacted and is pushing to enact,” Hild added.

The other side: BlackRock disputes it is pushing to implement or supplement public policy, instead arguing the energy transition from “brown to green” is a hugely profitable investment.

• “We are a fiduciary to our clients, helping them navigate investment risks and opportunities so they can reach their long-term financial goals, not engineering specific decarbonization outcomes in the real economy. The money we manage is not our own — it belongs to our clients, many of whom make their own asset allocation and portfolio construction decisions,” BlackRock told Axios.
• “Many of our clients are choosing to invest in a mix of traditional energy companies, natural gas infrastructure, renewables and new decarbonization technologies because of the investment opportunities stemming from their crucial role in the economy.”
• Read BlackRock’s 2030 net zero commitment

Our thought bubble: Fossil fuel states and conservatives are launching a multi-front war over climate policies that they fear are de-facto efforts to steer private capital away from oil, gas and coal, writes Axios energy reporter Ben Geman.