Welcome back to the Strawman, the daily climate newsletter that’s like a big gulp of water after you wake up in the morning - we just hit different.

Today we’re getting in to a new phase of shareholder activism with BlackRock’s latest moves. Let’s dive in to it.

Putting the ESG in ETFs

This week, BlackRock, the world’s largest money manager, announced that retail investors will be able to participate in proxy voting for ETFs.

In other words, investors who own shares in BlackRock managed Exchange Traded Funds will be able to indicate the way in which they’d like to vote on key issues and BlackRock will reflect this on their behalf.

By the nature of the fund sizes as well as the strategies these funds deploy, BlackRock owns as much as 20% of some of the largest companies in the U.S. If investors take up the vote, they could have a massive impact on the pressure applied to large corporates.

In the last few years, shareholder activism has emerged as a key strategy to pressure businesses in to cleaning up their emissions act.

They already offer this option to institutional investors who own over $2.1tn in listed assets to BlackRock and the new extension is expected to impact hundred of billions of dollars worth of voting influence.

Power to the people right?

1 Step Forwards, 2 Steps Sideways

That said, over the last few years BlackRock has been attacked from both the left, who argue that they don’t back enough ESG proposals, and the right, who argue that BlackRock is forgoing profits through their voting record.

It’s unclear exactly what impact the changes will have on how much support ESG policies at BlackRock owned companies get. It all depends on how the people vote. If we know one thing, it’s that people are lazy…

The reality is, BlackRock is trying to insulate itself from accusations across the political spectrum and return to its humble origins as an asset manager.

Ironically, the day following this announcement, BlackRock also announced that the CEO of Aramco, the oil giant, is joining its board. BlackRock has multiple billions of dollars invested across various Aramco entities and they’re doubling down on the relationship.

In case we were confused, this should make it pretty clear, BlackRock’s not in the climate business. It’s in the money business. And as things stand, there’s still plenty of money in oil.

Til next time,

The Strawman