Larry Fink, the chief executive officer of BlackRock, will no longer use “the word ESG” because he believes it has been “weaponised by the far-left and the far-right”, he said at the Aspen Ideas Festival in the US on Sunday.

“I don’t use the word ESG anymore, because it has been entirely weaponised,” said Fink when he was interviewed at the festival.

He added that his past calls for stakeholder capitalism and for companies to decarbonise faster were misinterpreted as political statements.

“I’m a big believer that you have to focus on all your stakeholders,” said Fink. “But I’m not going to use the word ESG because it has been misused.”

Several Republican-led states have pulled money out of BlackRock in protest against the firm’s championing of ESG and support for annual general meeting (AGM) resolutions that called on companies to reduce their carbon footprint and align themselves with the Paris Agreement.

Ostensibly careful not to be accused of partisanship, Fink said ESG was also being “weaponised” by far-left activists demanding BlackRock to decarbonise its investments – something that he said he is “not permitted to do”.

ESG funds

A BlackRock spokesperson said that despite Fink’s comments BlackRock will continue to use the term ESG in conversations with clients in Europe.

The asset manager offers 421 products to UK investors that include the term ESG in their fund name, most of which are index trackers.

In official communications, such as Fink’s annual investor letter, BlackRock has already started avoiding the use of the term ESG, preferring instead terms such as “transition risk” and “climate risk”.

“ESG is a rather broad term that is open to interpretation,” the spokesperson said. BlackRock has slashed support for climated-related shareholder resolutions at AGMs last year.

In a study by NGO ShareAction, the firm was found to have reduced its support for environmental resolutions at energy companies from 72% in 2021 to 16% in 2022. 

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