The Big Three passive asset management firms—BlackRock, State Street, and Vanguard—have been criticized for using investors’ money in pursuit of political goals. The firms use the funds that they invest on behalf of their clients and vote the proxies that, outside a pooled index or mutual fund, investors would typically vote themselves. ESG critics have said that such practices undermine shareholder rights.
BlackRock has responded to this criticism by promising to give their clients the ability to vote for the proxies associated with their stock shares. The firm began allowing some large institutional clients to vote their proxies last year and is preparing to open the option to more investors.
Wikipedia describes BlackRock, Inc. as an American multinational investment company based in New York City. Founded in 1988, initially as an enterprise risk management and fixed income institutional asset manager, BlackRock is the world’s largest asset manager, with US$8.59 trillion in assets under management as of December 31, 2022.
“We engage with companies to inform our voting and promote sound corporate governance that is consistent with long-term financial value creation,” said BlackRock
“BlackRock operates globally with 70 offices in 30 countries and clients in 100 countries. It is the manager of the iShares group of exchange-traded funds, and along with The Vanguard Group and State Street, it is considered to be one of the Big Three index fund managers,” said Wikipedia.
Its Aladdin software keeps track of investment portfolios for many major financial institutions and its BlackRock Solutions division provides financial risk management services. “BlackRock is ranked 184th on the Fortune 500 list of the largest United States corporations by revenue,” said Wikipedia.
“BlackRock has sought to position itself as an industry leader in environmental, social, and corporate governance (ESG). It has been criticized by some for investing in companies that are involved in fossil fuels, the arms industry, and human rights violations in China.”
Zenger News tracks support for and opposition to the environmental, social, and corporate governance (ESG) investing movement.
Produced in association with Ballotpedia
Edited by Priscilla Jepchumba and Judy J. Rotich
