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BlackRock‘s Investment Choices Are Under Scrutiny

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EDITOR'S NOTE: 

A double standard that weakens America’s prospects in exchange for a profitable footing in China: BlackRock’s investment choices are in the spotlight as it imposes a punitive ESG policy on ExxonMobil while allowing PetroChina to continue operating with no net-zero emission controls. 

 

Why is this significant? Some see it as an opportunistic move to gain favor in China at the expense of betraying the American public. If Blackrock chose not to impose ESG policies on ExxonMobil, as it’s currently doing with PetroChina, such an act might have helped ease the pain at the pump. Furthermore, many state governments are investing their pension funds with BlackRock which, in turn, is investing these funds into companies with ties to the Chinese military.   

Our thought bubble: Skeptics are saying that BlackRock’s actions risk not only American pensioners’ funds but the security of the nation as a whole. They also see it as a move to level the geopolitical playing field by weakening America’s economic capacity in order to strengthen China’s industrialization. From a pragmatic viewpoint, it’s hard to argue that these accusations hold no merit.

BlackRock, the world’s largest investment manager that oversees $10 trillion in client funds, has positioned itself as a socially conscious firm. However, the company is choosing China over the United States as it advances its environmental and social priorities, according to Will Hild, executive director of Washginton-based nonprofit Consumers’ Research.

Hild said BlackRock CEO Larry Fink is “selling out the interests of American consumers and American companies in the United States, in return for personal favors for BlackRock in mainland China,” during a recent interview with EpochTV’s “China Insider” program.

Fink has been one of the most prominent advocates for ESG investment, which is investing in companies that agree to uphold certain environmental, social, and governance standards.

However, according to Fink, ESG “is an excuse for Wall Street to push politics into corporate America.” In other words, Wall Street is pushing ESG policies that “could never be achieved at the ballot box,” he added.

Additionally, BlackRock has also taken up the position of supporting a net-zero emission future. The company’s website tells its clients that “climate transition creates a historic investment opportunity.” In a 2020 letter to CEOs, Fink wrote that “climate risk is investment risk.”

While BlackRock has pushed U.S. companies such as ExxonMobil to embrace green energy, it has not taken the same approach with Chinese firms, according to Hild.

“Ironically, Blackrock controls about the same amount of shares, about seven-and-a-half percent, of PetroChina as they do Exxon, but they don’t engage in any of the same behavior when it comes to that company,” he said, such as pushing Chinese companies to adopt net-zero policies.

PetroChina is the listed arm of China’s state-owned China National Petroleum Corporation (CNPC). In February, Russian state-owned energy company Gazprom inked a 30-year deal with CNPC, paving the way for Russia-to-China natural gas via a new pipeline linking the Russian Far East with northeastern China.

”I think if they did, Larry Fink would find himself not welcomed in mainland China very quickly because we know how that government acts,” Hild continued.

Epoch Times Photo

Will Hild, executive director with Consumers’ Research, speaks with NTD in March 2022. (NTD News)


Hild said BlackRock’s excuse for not pushing Chinese firms is “so absurd.”

“The excuse that they use is that China is still a developing economy, and so we cannot force the same rules on them,” Hild explained.

In 2021, BlackRock sided with hedge fund firm Engine No.1, which replaced new directors on ExxonMobil’s board, believing that the oil giant had responded too weakly to the climate crisis. Citing a Wall Street Journal report, Hild said the board subsequently considered divesting itself from two gas and oil projects in Mozambique and Vietnam.

Hild argued that the projects would have “served American consumers at the pump so that prices could have been brought down.” 

“Effectively BlackRock and Larry Fink are using America as China’s carbon offset. They are not putting pressure on China to decarbonize,” he said.

“And so they are putting up corporate America on an unlevel playing field here in the United States, against their rivals in China,” he continued. “And they’re using American investment dollars to do that.”

One favor BlackRock has had from the Chinese regime was being granted the right to start the first wholly foreign-owned mutual fund business in China, according to Hild.

In August 2011, BlackRock Fund Management Co. Ltd, BlackRock’s business in China, launched a mutual fund product in China, making it the first mutual fund offering by a wholly foreign-owned company, according to China’s state-run media.

Many state governments in the United States have invested their pension funds with BlackRock. According to a 2021 report (pdf) from Consumers’ Research, Washington, Florida, and New York were the top three investors, investing $13.8 billion, $10.7 billion, and $9.8 billion, respectively,

The report also warned about BlackRock putting investors’ money in Chinese companies with ties to the Chinese military, such as China’s biggest chipmaker SMIC.

“BlackRock’s investment choices are not only risking the security of U.S. pensions, but the security of our nation as a whole,” according to the report.

With the United States facing record-high inflation, Hild believes that BlackRock’s investment decisions, which help industrialize China while deindustrializing the United States, are not benefiting pensioners.

“It’s going to hurt their returns as pensioners. And it’s going to hurt them at the gas pump and the grocery store and all the other places they spend money,” he said.

The Epoch Times has reached out to BlackRock for comment.

Frank Fang
Source: Epoch Times

Frank Fang is a Taiwan-based journalist. He covers US, China, and Taiwan news. He holds a master's degree in materials science from Tsinghua University in Taiwan.

David Zhang
Source: Epoch Times

David Zhang is the host of China Insider on EpochTV. He is currently based in New York and Washington DC covering China-related news. He focuses on expert interviews and news commentary on China affairs, especially issues regarding the U.S.–China relationship.

Originally published by Epoch Times.

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