Do you have a non-conspiracy person Youtube source?
The whole ESG thing is a weird Kabuki theater thing to hang your argument on. Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply. The fact that do many choose to do so is pretty voluntary.
Blackrock funds have mandates. If the mandate says ESG score must be >10 then that fund must hold ESG >10 stocks.
Nobody is holding a gun to investors heads, forcing them to allocate money into funds that have this mandate that then only buy stocks that fulfil this mandate.
> Is a huge financial institution threatening to sell not a 'reason' and a form of power?
Investors threaten to sell stock all the time. Sales are shit - im gonna sell my stock unless you fire some people. Not paying a dividend - im gonna sell my stock unless you pay one. Stock price is performing poorly - im gonna sell my stock unless you do a stock split to con people into thinking the stock is cheaper.
When has Blackrock tanked a stock and where are the ESG changes? Ultimately the are fiduciary as an asset manager for their clients they can't decide to tank stocks for fun. A huge part of the holdings are in ETF which they can threaten to sell. Any deviation from typical huge fund manager behaviour when it come to governance is big finance news they hardly ever go against the grain. The biggest reason tho is that no one in Finance really gives a hoot about ESG, only returns
>Any deviation from typical huge fund manager behaviour
You make it sound extremely subjective, but Blackrock is (I think) mostly managing index funds, and it should be easy to quantify how well they track an index.
I'm talking about corporate governance stuff like AGM and voting. They own a so much of companies because of index funds, but when they do make noise it makes the headlines of finance news.
>Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply.
When Blackrock is the largest, or one of the largest shareholders in many companies - YES, they have enormous power in the decision making of those companies.
Blackrock is shareholding on behalf of individual investors. The amount of decision they can wield is pretty constrained. If I hire you to do my shopping, you can't just cross items off the list because you want to power trip on the butcher.
Furthermore, even if I buy into the hypothetical that Blackrock would dump a company from its portfolio over ESG, how much would it actually drop the price of the stock if the fundamentals are the same? Is the problem that there are not enough greedy investors on Wall Street?
If you buy shares in a Blackrock S&P 500 fund, which is the sort of fund that accounts for their huge holdings of most public companies, then I don't think they have the power to dump stocks that are on the official list.
That would be weird. I mean, at least it would be much more newsworthy than this article, and I would expect to have heard. And I would expect massive lawsuits and regulators out for blood.
The whole ESG thing is a weird Kabuki theater thing to hang your argument on. Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply. The fact that do many choose to do so is pretty voluntary.