A consumer watchdog group has unveiled a multi-million-dollar campaign against BlackRock, the world’s biggest money managers, for hectoring American businesses about leftist causes while simultaneously investing in Chinese companies with poor records on human rights and the environment.
Consumers’ Research is rolling out advertisements, billboards in New York City and a website, BlackRockLovesChina.com, that argue it is hypocritical for BlackRock and its executives to preach one thing at home while turning a blind eye to abuses in China.
“No amount of woke posturing can hide what BlackRock is really up to,” said Consumers’ Research executive director Will Hild. “The idea that an American company is taking billions of dollars and using it to bet on China’s success is extremely concerning. Funneling Americans’ hard-earned retirement savings to China is unsafe from both a national-security and financial perspective.”
It is unclear just how much money BlackRock may be investing in China and its companies, although it is reportedly a small fraction of the more than $9.6 trillion of assets the firm manages. BlackRock’s China A Opportunities Fund has more than $47.4 million, according to its most recent report.
The company did not respond to questions about its investments in China, which is the largest producer of greenhouse gases in the world and has been accused by human-rights groups and Congress of using slave labor to produce some products.
Published reports show BlackRock invests in at least two Chinese companies — iFlytek and Hikvision — that have been added to the U.S.’ “entity list” for national security and foreign policy reasons, such as surveillance and the treatment of the minority Uyghur population in China. It is not illegal to invest in such companies, which are themselves outlawed from buying and selling U.S. goods.
In addition, by arrangement with the Chinese Communist Party, BlackRock now has a retail fund presence in China, telling CNBC in September it had raised more than $1 billion from more than 100,000 Chinese consumers.
“Putting money into surveillance companies used by the Chinese military,” the 30-second Consumers’ Research ad claims, citing a Wall Street Journal report.
The ad features screenshots of BlackRock CEO Larry Fink.
“Larry Fink loves to tell Americans how to live but he negotiated against America,” says the campaign, titled, “BlackRock: Taking Your Money; Betting On China.”
The campaign joins a growing chorus of investors who are sharply critical of BlackRock‘s expanding presence in China and its relationship with Chinese Communist leaders. In September, left-wing billionaire George Soros wrote in the Wall Street Journal that the money management giant’s growing presence there was “a tragic mistake” that could “damage the national security interests of the U.S. and other democracies.”
BlackRock’s enormous size gives it considerable Wall Street muscle, which Mr. Fink flexes in his hugely influential annual letter to CEOs. He has regularly pressured American business leaders to toe a leftist line on global warming and, more recently, race.
He did so again in his 2021 letter, which consistently stresses “stakeholder” over “shareholder” value.
“Given how central the energy transition will be to every company’s growth prospects, we are asking companies to disclose a plan for how their business model will be compatible with a net-zero economy – that is, one where global warming is limited to well below 2ºC, consistent with a global aspiration of net-zero greenhouse gas emissions by 2050,” he wrote.
Mr. Fink made a similar plea with regard to race.
“As you issue sustainability reports, we ask that your disclosures on talent strategy fully reflect your long-term plans to improve diversity, equity, and inclusion, as appropriate by region,” he wrote.
The relationship between BlackRock, Mr. Fink and Chinese Communist leaders is one the company does not always brag about to U.S. investors, according to Consumers’ Research.
“We cannot let executives like Larry Fink try and tell Americans how to live while simultaneously cozying up to one of the world’s leading human rights abusers,” Mr. Hild said. “By putting BlackRock’s shady dealings out in the open for all to see, we’re sending a message that companies won’t get away with taking advantage of hard-working Americans. Any company trying to use woke politics to mask their misdeeds should see this campaign and know they could be next.”
Consumers’ Research, a conservative-leaning non-profit, describes its mission as increasing “the knowledge and understanding of issues, policies, products and services of concern to consumers and to promote the freedom to act on that knowledge and understanding.”
The group has targeted businesses it believes are putting a greater priority on virtue signaling than improving its products and bottom line for consumers and investors. Previous campaigns were directed at American Airlines, Coca-Cola, Nike, Ticketmaster and Major League Baseball when it moved the 2021 All-Star Game because of Georgia’s voting laws.
BlackRock is particularly profitable with its hypocrisy, according to William Flaig, who runs the American Conservative Values ETF fund, which steers clear of stocks in companies it believes are taking flagrantly political positions.
“They say they care about these things and then they invest in China, which doesn’t care about these things at all,” Mr. Flaig said. “BlackRock’s just in it because they can make more money. Do they really care about all this, or is it just that they can charge higher fees?”
Mr. Flaig was referring to what Morningstar, in its 2020 Fee Fund Study, called a “greenium,” in which investors pay higher fees to funds that trumpet their allegedly environmental positions.
While fees for funds emphasizing “sustainability” have dropped in the last decade, their percentage drop — 27% — trails that of management fees overall that have dropped by 38% in that time, according to Morningstar’s research.
Mr. Fink said the “greenium” makes sense from a long-term perspective and in his most recent letter pointed to an accelerating rate of investment globally in “sustainable assets.”
BlackRock’s shares were trading at $948.94 Thursday, just off its 52-week high. The China A Opportunities Fund has returned 32.05% since its inception in December 2018, according to its reports.
