Larry Fink isn't saying 'ESG.' But he is urging investors to stay focused on climate.
BlackRock (BLK) CEO Larry Fink on Friday kept to his pledge to no longer use the acronym ESG. But he also made it clear that investors would be wise to keep their focus on climate concerns.
In its quarterly earnings announcement, BlackRock announced that assets under management rose to $9.4 trillion while net income rose and revenue fell. Then, in a conference call, Fink seized on a question about transition investing, which is loosely defined as putting money beyond the transition to a carbon-free economy.
He didn't refer to ESG — an acronym he believes has been "weaponized" by the left and the right — but called transition investing "probably one of the greatest opportunities in the world today." ESG stands for investing with environmental, social, and corporate governance principles.
"We're having more and more conversations with more and more corporations about how they think about their platform related to decarbonization," he added.
Fink has become a prominent face in the debate about ESG in recent years as Republicans in Washington now look to limit do-good investing.
"One of the concerns I've got is the fiduciary responsibility of these investment groups like BlackRock," Rep. Blaine Luetkemeyer, a Republican from Missouri, said at a Congressional hearing this week.
Luetkemeyer is one of the leaders of the anti-ESG efforts expressing worry that "political agendas overshadow sound financial management."
'There's not a government that is not focused on this'
BlackRock has garnered much of the political attention because of its outsized power across the economy and the proxy voting power it holds at nearly every major S&P 500 company.
Fink is certainly not shying away from his focus on climate issues. He traveled earlier this week to the United Kingdom for a climate-themed event at Windsor Castle that featured King Charles III and President Joe Biden as well as other business leaders like Bank of America CEO Brian Moynihan.
Fink on Friday emphasized that government actions around climate change represent much of the opportunity for investors in the years ahead.
"There's not a government that is not focused on this, [and] how do they successfully navigate their economy and energy and power is becoming one of the dominant conversations."
BlackRock itself has also taken an increasingly direct role in the energy transition by providing funding to companies looking to raise capital for energy projects.
On Friday, Fink touted a recent $700 million investment in Australian battery storage and a carbon sequestration project in the US.
For Fink, a focus on the climate will clearly be a long-term focus, saying, "We look at this as a multi multi-year growth opportunity."
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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