CEO Larry Fink feels the pinch as Florida's asset pullback dents BlackRock's stature

AP Photo/Mark Lennihan, File

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BlackRock's CEO, Larry Fink, who has raised conservative eyebrows across the U.S. with his company's socially conscious stances, reportedly conceded that the company felt the sting when Florida's Republican governor, Ron DeSantis, withdrew $2 billion in assets managed by BlackRock in 2022.

According to Axios, Fink admitted during a Sunday conversation at the Aspen Ideas Festival that DeSantis' decision to pull back assets had a significant impact on his firm in 2022.

Florida Chief Financial Officer Jimmy Patronis announced the pullback from BlackRock in early December 2022. This decision came months after DeSantis and other trustees of Florida’s Board of Administration (SBA) passed a resolution to direct the state of Florida’s fund managers to invest state funds, putting aside the ideological influences of the environmental, social, and corporate governance (ESG) movement.

In a firm stance, DeSantis expressed, “we are prioritizing the financial security of the people of Florida over whimsical notions of a utopian tomorrow." He asserted that Florida's tax dollars and proxy votes would no longer be steered by Wall Street financial firms to execute policies that Floridians had already rejected at the ballot box.

BlackRock hit back at DeSantis and his state, alleging that political initiatives like Florida's could sacrifice access to high-quality investments, thereby jeopardizing returns and ultimately hurting Florida’s citizens.

BlackRock also witnessed the withdrawal of funds from South Carolina, Louisiana, and Missouri in 2022. Louisiana State Treasurer John Schroder voiced his disapproval of BlackRock's support of ESG investing, saying it went against Louisiana's economic interests and values.

According to Axios, Fink expressed regret about being a part of this conversation and shared that he would no longer use the term “ESG” since it was becoming politically “weaponized.” He stressed that his investment letters were never intended to be political statements, but to highlight long-term issues for their long-term investors. However, when pressed further, Fink clarified, “I never said I was ashamed. I’m not ashamed. I do believe in conscientious capitalism.”