Why The Fine Print Is Fine: BlackRock's "Sustainability" Goals Don't Mean A Thing; FF Investment Marches Right Along [View all]

In 2016, Larry Fink, CEO of investment firm BlackRock, had no doubts about the importance of environmental, social, and governance (ESG): “Over the long term, ESG issues – ranging from climate change to diversity to board effectiveness – have real and quantifiable financial impacts”, he wrote in a letter on corporate governance in 2016. The CEO of the world’s largest asset-management company has since changed his mind: “The reason I backed away from using the term ESG is that it means something different to everyone. It’s so undefined that it’s become unmentionable”, Fink said in 2023, as a guest on the Wall Street Journal podcast “Free Expression”. In the same podcast, he added: “If you want to invest in hydrocarbons, we will select the best hydrocarbon companies in the world for you. If you want to invest in a more decarbonized portfolio, we’re going to try to find the best economic portfolio that will achieve your financial goal.”

BlackRock manages US$11.6 trillion of investments. The firm has drastically changed its ESG and sustainable-investing policies in recent years. In its 2020 letter to clients, BlackRock used the term “ESG” 26 times and made a bold assertion: “We believe that sustainability must become our new standard for investing.” It also pledged to launch a product “that allows clients to invest in companies with the highest ESG scores, using our most extensive exclusion criteria, including one for fossil fuels.”

These commitments were widely covered in the international media. In January 2020, the specialist magazine UK Investor headlined: “BlackRock to focus on ESG and climate change in 2020”. CNBC wrote: “BlackRock, a $7 trillion asset manager, puts climate change at the heart of its investment strategy for 2021.” The specialist publication ESG Today asked: “BlackRock is betting everything on sustainability: Why is this important?”

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In its sustainability report, meanwhile, BlackRock makes a confusing claim that might raise eyebrows among the more attentive clients: “This Fund promotes environmental or social characteristics, but does not aim to invest sustainably.” The statement seems to conflict with the very description of the investment, which talks of “a meaningful approach” to sustainable investing. To further protect itself, BlackRock makes clear that any sustainability conditions “do not change a fund’s investment objective or limit its investment universe, and there is no indication that a fund will adopt investment strategies focused on ESG factors, impact, or exclusion criteria”. BlackRock thus effectively contradicts its own promise to exclude fossil fuels. In the first quarter of 2025, such nominally “green” funds held fossil-fuel assets worth more than US$1 billion.

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https://www.desmog.com/2025/08/01/blackrock-pivots-from-sustainability-evangelists-to-fossil-fuel-funders/