>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.
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.