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HomeBusinessMarketsSenator Cruz criticizes Larry Fink for 'waking up' shareholder votes on climate

Senator Cruz criticizes Larry Fink for ‘waking up’ shareholder votes on climate

Senator Ted Cruz (R-TX) speaks at a press conference in the US Capitol in Washington DC on October 6, 2021.

Alex Wong | Getty Pictures

Senator Ted Cruz exploded Black Rock CEO Larry Fink proposed Tuesday that due to so-called “awakened” investment decisions — and money managers like Fink, they should be banned from voting on behalf of other investors “to advance their own political interests”.

“Because it’s not capitalism, it’s abusing the market,” Cruz of R-Texas said in an interview with CNBC. “The Scream Box.”

For most of the interview, Cruz blamed White House policies for the rise in gas prices since the President. Joe Biden He took office in January 2021.

But the senator has also targeted Fink, whose company is the world’s largest wealth manager, and other CEOs he argues are moving from focusing on increasing shareholder profits to gaining the favor of wealthy liberals by taking a stand on social issues like climate change. .

In a letter to CEOs of companies BlackRock invests in in 2020, Fink highlighted climate change as a problem facing companies. “Climate change has become a determining factor in companies’ long-term prospects,” Fink wrote. “I believe we are on the verge of a fundamental reshaping of finance.”

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On Tuesday, Cruz repeatedly voiced Fink’s support for ESG on environmental, social and governance issues in several shareholder votes.

“Does Wall Street also bear some of the responsibility? Exactly,” Cruz said, referring to the average price of regular unleaded gasoline in excess of $4.59 per gallon.

“There’s a Larry Fink surcharge, so every time you fill your tank you can thank Larry for the enormous and inappropriate ESG pressure,” Cruz said.

“What Larry Fink has done is unprecedented in the rise of ESG,” he later said.

“I think there’s a real problem with people voting on the shares of investing, passively invested funds,” Cruz said, referring to funds that invest in companies that belong to various stock indices. Said.

“Larry Fink is not using his own money to vote as a shareholder,” Cruz said. “What Larry Fink is doing is taking your stock and my stock and [those of] millions of little old ladies who have invested in funds and she is raising large sums of capital and has decided to vote not to maximize their returns because it seems that mandate to clients is not a priority. He votes for his politics instead.”

Cruz said that Fink “decided that he was more welcome when he entered the New York Country Club, and stood up to oil and gas, even if it reduced the returns on the accounts he managed and destroyed businesses and his enemies and hurt America.”

He said money managers who vote on shareholder issues based on their political interests rather than investors need more scrutiny.

“It’s not capitalism that abuses the market,” the Senator said.

When asked about Cruz’s comments, a BlackRock spokesperson said in an email, “The only agenda that keeps BlackRock voting by proxy is the long-term economic interests of the millions of people whose money we manage.”

“And we believe customers should have the option to choose for themselves how their proxy votes are used,” the spokesperson said. Said. “We lead the industry in offering proxy voting options.”

“Today, nearly half of our index equity holdings under management, including pension funds serving more than 60 million people, can choose how proxy votes are cast,” he said.

“While this is an industry first, we see it as just the beginning,” he said. “We seek technology and regulatory solutions to expand voting options for even more customers. Index investment has been a driver of democratizing investing at lower cost and more options for millions of Americans. We are committed to democratizing proxy voting.”

In his annual letter to CEOs in January, Fink said, “Stakeholder capitalism isn’t about politics. It’s not a social or ideological agenda. It’s not ‘awakened’.”

“This is capitalism driven by the mutually beneficial relationships between you and your employees, customers, suppliers and the communities your company trusts to thrive. That is the power of capitalism,” Fink wrote.

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