Money Managers Facing More Blowback Over ESG as GOP Pressure Mounts

December 10, 2022 – Media Mention

Partner and chair of Herrick's Corporate Department, Morris DeFeo, spoke to Bloomberg about how money managers, like BlackRock and Vanguard, are responding to mounting pressure from anti-ESG clients and politicians to withdraw from climate-finance coalitions. 

The article discusses "the battle over sustainable investing" and highlighted that the10 largest ESG funds by assets have posted double-digit losses this year. Morris noted that while the financial impact will likely be muted for BlackRock, which is in charge of almost $8 trillion, "the asset manager has been tangled in the messy debate on whether sustainable investing comes at the expense of investor returns, and could inflict reputational damage."

“If you are a fund manager — it’s not so much the dollars that are being pulled out, it’s the dialog that’s going on,” Morris continued. “If they are hearing from a number of different investors that are saying ‘I’m not happy with the direction you are heading, I don’t see it helping my portfolio, in fact I think it might be hurting my portfolio and I don’t want you thinking for me’ — if they’re getting a lot of pushback from investors, they are going to take that into consideration.”

Market turbulence and a dim economic outlook have helped amplify anti-ESG voices, Morris explained.

“In an environment where everyone’s portfolio was knocking it out of the park — those voices might get drowned out,” Morris concluded.

Read the full article in Bloomberg here. Access may require a subscription.