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Discussion on the Direction of the Economy The Green Face of BlackRock"The Great Reset"
A key promoter of this thrust has been BlackRock and its CEO Larry Fink. BlackRock is the world's largest asset manager and super-cartel with substantial shares in most of the top 300 corporations in North America and Europe, and a co-owner of over 17,000 corporations and banks worldwide. Most recently it has been appointed by the U.S. government and Federal Reserve to hand out hundreds of billions of public dollars to chosen financial institutions and corporations -- many in which BlackRock has investments -- in what has been described as the largest transfer of wealth in history. The company is also a key advisor to the Bank of Canada in its corporate bailout program. BlackRock Letters to CEOs and ClientsEvery year, Fink and BlackRock send out letters to CEOs of BlackRock associated companies and financial institutions, as well as other clients. In his 2018 letter to CEOs, Fink commented that "society is demanding that companies ...serve a social purpose" and that without such a purpose "no company... can achieve its full potential." He further argued that how well a company manages ESG (Environmental, Social & Corporate Governance) issues "demonstrates the leadership and good governance that is so essential to sustainable growth."[5] This was followed up more recently with another letter to CEOs in January of 2020 titled "A fundamental reshaping of finance,"[6] and which to some represents a fundamental shift of the company's focus on environmental matters to a more "green" approach. According to one analyst, this letter "sent shockwaves through corner offices" of corporations across America, given that BlackRock can exert substantial pressure through its sheer size and influence by pulling funding from companies and financial institutions that aren't toeing the line in regards to the environment,[7] as well as using other pressure tactics at its disposal. Of course, it will be BlackRock, the super-cartel and global enforcer, that ultimately decides the criteria by which such determinations will be made. Not surprisingly, some factions of the financial oligarchy, especially in the energy sector, are not happy about this development. BlackRock -- "Climate Risk Is Investment Risk"
According to Fink, such questions "are driving a profound reassessment of risk and asset values" and will result in "a significant reallocation of capital." In that regard, BlackRock's responsibility is "to help clients navigate this transition." His conclusion is that "sustainability and climate-integrated portfolios can provide better risk-adjusted returns to investors" and that "sustainable investing is the strongest foundation for client portfolios going forward." In other words, "climate risk is investment risk" and a "green" and "sustainable" focus will result in better financial outcomes for investors. Thus the logic of his argument is caught up entirely in the framework of making a profit for BlackRock and its clients. However, Fink does not explain what will happen to this "green" focus if realizing a profit is no longer possible. Nor does he explain that it is the same relentless pursuit of maximum profit in the past by the oligarchy, and which is inherent in the financial system, that has created today's environmental problems in the first place. Fink himself has been a big advocate of deregulation which many believe has allowed financial institutions to run wild over the years and corporations to pollute indiscriminately. BlackRock and StakeholdersIn any case, to achieve long-term profits, Fink argues that a company must consider "the needs of a broad range of stakeholders." He gives a number of negative examples including "a pharmaceutical company that hikes prices ruthlessly, a mining company that shortchanges safety, a bank that fails to respect its clients -- these companies may maximize returns in the short term." But, he argues, "as we have seen again and again, actions that damage society will catch up with a company and destroy shareholder value." He goes on to say that, "by contrast, a strong sense of purpose and a commitment to stakeholders helps a company connect more deeply to its customers and adjust to the changing demands of society" and that "ultimately, purpose is the engine of long-term profitability." In a third letter issued to clients in 2020,[8] this time from BlackRock's Global Executive Committee, the claim is repeated that "sustainability-integrated portfolios can provide better risk-adjusted returns to investors," and that includes "striving for more stable and higher long-term returns." In a recent report, BlackRock defines sustainable investing as "combining traditional investing with environmental, social and governance-related (ESG) insights to improve long-term outcomes for our clients."[9] It further claims that during this year's economic downturn ESG-titled portfolios outperformed their non-sustainable counterparts and this promises to be a growing trend, i.e. it is "a long transition just getting started." This "dynamic" is expected to accelerate, Larry Fink says, "as the next generation takes the helm of government and business."[10] BlackRock and "Sustainability"To move the process forward, BlackRock claims to make "sustainability" its standard building block in client investment portfolios, whether through its passive investment programs (such as index funds) or its active investment programs, which include mutual funds and which feature portfolio managers. In that regard, BlackRock currently offers more than 150 sustainable funds and investment instruments for its clients.[11] The firm also claims that it will reduce ESG risk in its active investment strategies, such as cutting back or ending investments in thermal coal producers, while at the same time expanding investments that "support the transition to a low-carbon economy." As part of its stewardship, BlackRock aims to hold client companies to account through proxy voting and other pressure tactics regarding how well they are disclosing and managing sustainability-related risks and how transparent they are in their stewardship practices. So far this year, according to news reports, BlackRock has taken material actions against management at 53 companies (mostly energy related) over climate concerns. These actions included "siding with shareholders on their proposals, voting against board members and raising governance concerns." In addition, BlackRock has put another 244 companies on notice for making "insufficient progress integrating climate risk into their business models or disclosures."[12] According to the second 2020 letter, Fink says that BlackRock, working with other index providers, plans to expand and improve sustainable index investment instruments, adding to those that the company already has in place. At the same time, the corporation believes that many clients will continue to prefer "traditional" investment strategies. It also recognizes that "while the low-carbon transition is well underway, the technological and economic realities mean that the transition will take decades" and that "global economic development, particularly in emerging markets, will continue to rely on hydrocarbons for a number of years." As a result, the portfolios it manages "will continue to hold exposures to the hydrocarbon economy as the transition advances." BlackRock -- "Having its Cake and Eating It Too"And so it is that BlackRock aims to have it both ways, to have its cake and eat it too. It wants to appear to be addressing the demands of youth and other sections of the people for climate change solutions, but to do so in ways that are profitable for BlackRock and its clients -- in spite of the fact these will end up perpetuating the problem. The company pulls this off by appearing to take action against some polluters, such as thermal coal, as well as providing sustainable funds for "green investments" for environmentally conscious investors. But, while doing so, it pledges to continue to provide investment vehicles and support for many years to come for chosen polluters in the oil & gas sector. Thus it will amass profit from both the "green" side and the "polluter" side of the equation. And the same configuration holds true in other ESG areas like war production. BlackRock will now be providing investment "baseline screens" which will allow investors to put money in BlackRock managed funds which screen out companies that manufacture controversial weaponry like landmines, cluster bombs and depleted uranium.[13] All the while, with other "less clean" funds and investments, it will be continuing to support major weapons manufacturers like Boeing, Lockheed Martin, and Northrop Grumman. As one critic put it: "Funding war and the nuclear arms race, or promoting social responsibility? It's not possible to do both at the same time."[14] BlackRock's Terrible RecordIndeed, there is a savage irony in BlackRock presenting itself as a "green" or "progressive" force on the world stage. For many critics, the super-cartel has a terrible record in regards to climate change, as well as on environmental and other social issues in general. For decades, BlackRock has been a top global investor in major polluting industries and war production companies, and has operated as a huge cartel with other asset managers and financial institutions. In that regard, it has one of the worst corporate voting records on climate issues. Between 2015 and 2019, BlackRock opposed more than 80 per cent of climate change-related motions at fossil fuel companies in which it has a stake.[15] As a result, some environmental groups have labelled BlackRock as the "biggest driver of climate destruction on the planet" and its sustainable initiatives as nothing more than "green wash."[16]
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At a time when
youth, workers and people all over the globe
have deep concerns about climate change, the environment, and the
political and economic system itself, influential factions of the
global financial oligarchy are calling for a "Great Reset" of the
financial system in the wake of the COVID-19 pandemic; or to put
it another way a "better" or "repurposed" capitalism, one which
can supposedly ensure its preservation. Such calls for a
"systemic change" and a return to "stakeholder capitalism,"
especially in regards to climate change, are coming from various
organizations of the North American and European oligarchies
including the World Economic Forum,[
In this letter,
Fink notes that climate change has become "a
defining factor" in the long-term prospects of companies, that
"awareness is rapidly changing," that millions of people have
taken "to the streets" and that the "evidence on climate risk is
compelling investors to reassess core assumptions about modern
finance." He gives examples as to how climate risk will "impact"
the physical world and the global financial system. "Will
cities," he asks, "be able to afford their infrastructure needs
as climate risk reshapes the market for municipal bonds? What
will happen to the 30-year mortgage -- a key building block of
finance -- if lenders can't estimate the impact of climate risk
over such a long timeline, and if there is no viable market for
flood or fire insurance in impacted areas?"
