Bluebell Capital, an activist investor, has launched a new campaign to force the $10 trillion fund giant BlackRock to rethink its lauded commitments towards environmental and social governance (ESG).
Next month, the London-based hedge funds, who have previously attacked Danone and GSK will likely attack the largest asset manager in the world. Bluebell believes BlackRock is at risk of reputational damage due to its high-profile commitment to ESG. This includes a backlash from Republicans in the US who object to BlackRock’s pro-environmental agenda.
The report also claimed that BlackRock was hypocritical with its approach. It cited cases in which BlackRock had opposed actions that could be considered ESG-aligned.
Bluebell Capital Partners manages £120 Million in its main fund, but despite this small size it has managed to compete with some of the largest companies around.
Bluebell began to push for change in BlackRock at the end of 2022. According to reports, the campaign will be intensified due to perceived inaction. It will publish new material about ESG policies before BlackRock files its proxy statement. This is a document US corporations publish to shareholders in advance of their annual meeting.
BlackRock manages $10 trillion in assets and is one of the three major asset managers along with State Street and Vanguard. BlackRock is one of the biggest shareholders of many of the largest companies in the world, including 2% of Britain’s FTSE-100.
Larry Fink BlackRock’s CEO wrote in 2020 that sustainability would be the “new standard” of investing. He outlined initiatives, including a pledge to remove from the actively managed portfolios companies that derive more than 25% of their revenue from thermal coal. Since then, its sustainable assets have increased by eight times.
BlackRock’s strategy has attracted the ire of Republican politicians. Florida’s state treasurer decided in late 2022 to divest millions from BlackRock due to these concerns. The governor, Ron DeSantis lambasted BlackRock for pushing a “leftist agenda”.
Bluebell bought a stake around that time and wrote Fink to say: “It’s not BlackRock’s role to dictate the public debate about climate and energy policies, or to impose ideologies on the corporate world.”
BlackRock’s activities as an investment contradicted the public endorsement it had given to ESG. BlackRock refused to help Bluebell stop Solvay from dumping soda-ash into the Mediterranean Sea.
The fund’s primary fund has a budget of £120 million, but that doesn’t stop it from taking on some of the largest companies in the world. It took part in 2021 in a campaign that led to the downfall of Danone’s chief executive. In the same year, it teamed up with activist Elliott to urge Emma Walmsley to apply again for her position as CEO at drugs giant GSK. It lobbied BP more recently to reduce the oil production cuts.
BlackRock stated: “Activists and others run campaigns every year to further their individual agendas.” BlackRock’s money does not belong to activists or to anyone else who has an agenda. It belongs to its clients and we will continue managing their money in accordance with their long-term objectives.
Bluebell has declined to comment.