After years of encouraging investors to invest in companies with responsible environmental, social and governance (“ESG”) practices, BlackRock CEO Larry Fink announced in mid-2023 that he wouldn’t use the term ESG anymore. Fink noted that the word has been misused and weaponized by the far left and far right and said he was ashamed to be part of the debate around using the term “ESG.” Fink’s investment approach can significantly affect the market as he currently stands at the helm of the world’s largest asset manager with $9.2 trillion under management.
BlackRock’s attitude toward responsible ESG investing has been quite bullish for the past several years, and many conservatives have blasted the asset manager for engaging in ‘”woke capitalism.” With many calling Fink “the face of woke capitalism,” his recent statement has sent shock waves surging through the business world.
Financial data company FactSet revealed that the term ESG was directly mentioned just nine times among S&P 500 companies in hundreds of earnings calls compared to 156 mentions in Q4 2021 when the use of the term “ESG” peaked. The 2024 citations of the controversial term were either very brief or reflected the more charged political landscape, Yahoo Finance says.
MSCI chief financial officer Andy Wiechmann said in a recent earnings call that clients are adopting a measured approach to integrating ESG. Although the term was mentioned in a handful of recent earnings calls, most of the top companies have stopped using the term completely. However, this doesn’t mean the conversation regarding environmental, social and governance issues has died.
Rather than use the term “ESG,” companies are leveraging different buzzwords or simply holding straightforward discussions on how climate change can affect business decisions. Financial data company FactSet says climate change and other related issues are still topics of interest for major banks even though none of them directly mentioned ESG.
At JPMorgan Chase, CEO Jamie Dimon informed his investors of the need for increased spending due to the expanding green economy and said the company would remain vigilant due to “significant and somewhat unprecedented forces.”
Fink stayed true to his word during the asset manager’s earnings call and refrained from using the term “ESG.” The company discussed plans to purchase private equity from New York City-based company Global Infrastructure Partners without mentioning ESG even though Fink said energy transition and a changing climate were some of the key factors driving the deal.
Fink told investors that capital and infrastructure would be necessary to decarbonize the earth and said BlackRock’s investors could gain “compelling investment opportunities” from supply and demand imbalances.
What is unmistakable is the commitment of several companies, such as First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF), to implement ESG principles in their operations given that the benefits to the companies’ bottom lines is all too apparent.
NOTE TO INVESTORS: The latest news and updates relating to First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF) are available in the company’s newsroom at https://ibn.fm/FSTTF
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