BlackRock chief executive Larry Fink has been asked to step down by activist investor Bluebell Capital over the company’s alleged “hypocrisy” regarding environmental, social and governance (ESG) messages.
Fink has become an outspoken advocate of stakeholder capitalism and in his annual letter to CEOs earlier this year he rejected allegations that the giant asset manager is using its size to push a political agenda. However, in a letter to Fink dated Nov. 10, shareholder Bluebell expressed concern about “the reputational risk (including greenwashing risk) to which BlackRock, under the leadership of Larry Fink, has unreasonably exposed the company.” In a statement sent to CNBC on Wednesday, BlackRock responded, “Over the past 18 months, Bluebell has conducted a number of campaigns to advance its climate and governance agenda.” “BlackRock Investment Stewardship did not endorse their campaigns because it did not deem them to be in the best economic interest of our clients.”
London-based activist fund Bluebell, with around $250 million in assets under management, which owns a small stake in BlackRock, has targeted the likes of Richemont and Solvay before. Partner and cofounder Giuseppe Bivona said the firm was concerned about “the gap between what BlackRock consistently says on ESG and what it actually does,” based on Bluebell’s meetings with the Wall Street giant during activist campaigns. directed to these companies.
“We see BlackRock endorsing a number of bad practices from a governance, social and environmental perspective that doesn’t really fit with what they say,” Bivona said. “In our latest activist campaign on Richemont, they opposed increasing board representatives from one to three for investors who own 90% of the company. I really don’t think this is in the best interest of the investor, in whom he invests his money on a fiduciary basis, and obviously it is not in the best interest of any shareholder.’ Bivona also took aim at BlackRock’s promise to customers for 2020 to exit investments in thermal coal, which according to its letter to customers on sustainability is no longer justified by “long-term investment or economic reasons.”