The whole ESG thing is a weird Kabuki theater thing to hang your argument on. Blackrock had almost no power to enforce ESG, and companies almost have no reason to comply. The fact that do many choose to do so is pretty voluntary.
Your rebuttal is, blackrock no power to enforce ESG scores. And companies have no reason to comply.
Is a huge financial institution threatening to sell not a 'reason' and a form of power?
You make it sound extremely subjective, but Blackrock is (I think) mostly managing index funds, and it should be easy to quantify how well they track an index.
Nobody is holding a gun to investors heads, forcing them to allocate money into funds that have this mandate that then only buy stocks that fulfil this mandate.
> Is a huge financial institution threatening to sell not a 'reason' and a form of power?
Investors threaten to sell stock all the time. Sales are shit - im gonna sell my stock unless you fire some people. Not paying a dividend - im gonna sell my stock unless you pay one. Stock price is performing poorly - im gonna sell my stock unless you do a stock split to con people into thinking the stock is cheaper.
When Blackrock is the largest, or one of the largest shareholders in many companies - YES, they have enormous power in the decision making of those companies.
That would be weird. I mean, at least it would be much more newsworthy than this article, and I would expect to have heard. And I would expect massive lawsuits and regulators out for blood.
I could be wrong. Do you have a source?
Furthermore, even if I buy into the hypothetical that Blackrock would dump a company from its portfolio over ESG, how much would it actually drop the price of the stock if the fundamentals are the same? Is the problem that there are not enough greedy investors on Wall Street?