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?
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.
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.