BlackRock® invests other people’s money and a lot of it, but not everyone is happy about how. Its commitment to “Environmental, Social and Governance” (ESG) has become an albatross around the company’s neck.
BlackRock plans to dismiss some 500 workers as the asset management company seeks to contend with heavy losses.
The company’s assets under management declined from $9.5 trillion in the third quarter of 2021 to $8.0 trillion in the third quarter of 2022, according to the firm’s most recent earnings report. The reduction in headcount, which represents less than 3% of the BlackRock workforce, occurs after one of the worst years for the stock market in history and similar layoffs in other industries.
That’s not money lost due to a declining market. This is money that got up and went someplace else. You can add market losses to it, and as Ace notes, there are probably some FTX losses hiding in the balance sheets as well.
Net-Zero Climate Woke “banking” has not had a great year.
In October, nineteen states joined a lawsuit to investigate a who’s who of banks that might be basing lending or investment on commitments to the ideologically driven notion of ESG. States (primarily red) have also announced their intention to reallocate their assets of public money (like pensions) away from firms like Black Rock.
It’s good advice.
The losses come amid BlackRock executives’ promulgation of the environmental, social, and corporate governance movement, also known as ESG, by which managers commit themselves to pursue green energy, appointing minorities to serve as managers, or otherwise blending profitability with activism. BlackRock has taken “voting action on climate issues” against dozens of portfolio firms, according to a company stewardship report.
Critics say the recent poor performance of ESG funds discredits the movement.
Translation: you will invest in sh!tty poorly-performing funds or else!
Or else what?
Or Black Rock will have to fire 500 employees. That’s 3% of their workforce. And while BlackRock plays woke, how will they decide who stays and who goes? Will it be color-blind based on performance, or is race or gender more important?
HT | AoSHQ
