BlackRock Faces Business Risks Over ESG Focus

The asset management giant's annual SEC filing reveals potential negative impacts of its environmental, social, and governance policies.

BlackRock, the world's largest asset manager, has acknowledged in its annual SEC filing that its focus on ESG (environmental, social, and governance) policies could significantly impact its business negatively.
The firm's ESG portfolio, valued at $700 billion, represents a small fraction of its $10 trillion in total assets, with plans to increase investments in issuers with net greenhouse gas emission reduction targets by 2030.
Political polarization over ESG has led to backlash from Republican politicians and conservative states, resulting in investment boycotts and legislative actions against the company.
BlackRock CEO Larry Fink has expressed regret over the politicization of ESG, stating he no longer uses the term but remains committed to discussing decarbonization and social issues with companies.
Critics argue that prioritizing ESG not only fails to deliver superior financial returns but also does not achieve the environmental and social outcomes it claims to pursue.