Larry Fink, founder of Blackrock investment behemoth, is confusing me.

He’s here in Australia at present and inevitably has given interviews to the press. In one, he sounded almost whiny about the growing blowback against the ESG agenda he has pushed for at least a decade.

ESG, acronym for Environmental, Social and Governance, is a means of rating a business. The rating agency decides what performance standards should be met under ESG goals and rates the business accordingly. Those goals could be anything the rating agency fancies, such as the number of racial minorities represented at executive level, or how many different types of bathrooms are installed, or yadah yadah address climate change. Fink has tried to disguise the true nature of ESG rating by presenting it as a force of good, a driver of business growth.

Blackrock is a powerful ESG ratings agency. It uses it power to influence behaviour. In a public forum run by the New York Times in 2017, Larry Fink was interviewed and he said:

“Behaviours are going to have to change and this is one thing we are asking companies, you have to force behaviours and at BlackRock, we are forcing behaviours.”

Through his annual letter to CEOs Fink has outlined his vision of future behaviours that he views as acceptable and those that he views as unacceptable. In his 2022 letter, he said:

“Every company and every industry will be transformed by the transition to a net-zero world. The question is, will you lead, or will you be led?”

Small wonder then that a backlash against Fink and his threatening tone has been growing. The poor thing almost seems hurt. This is what he said yesterday about the backlash, reported in The Australian newspaper:

“My letters have become weaponised,” he says. “When I wrote these letters, it was never meant to be political. Every letter was written to our clients and to our shareholders with the idea that we’re trying to be a voice of the long term. Every letter I’ve written is about trying to give our intelligence that we see as a firm, and I’m trying to impart to our clients the big macro issues we see.”

So here is my confusion. On the one hand, Fink says his letters were never meant to be political. On the other hand, he says that he uses Blackrock to force change in behaviour. These two statements are at odds with each other. Politics is, by definition, the battle for the power to force change in behaviour. Fink is forcing behavioural change, not through the traditional means of getting elected to a parliament to represent constituents, but through the global financial power of Blackrock. ESG is a political tool, not a force for good. Fink wants to defenestrate the nation state and place himself at the head of global governance without facing a ballot.

I’m confused as to why an intelligent chap would allow his duplicity to become public.