BlackRock CEO Larry Fink insists he's not woke and is still driven by profit after being accused by Republicans of turning his back on oil and gas

 BlackRock CEO Larry Fink has insisted he is not woke and is still driven by profit in his annual letter to shareholders, after being accused of leading Wall Street down a progressive, PC path and steering cash away from the oil and gas industries. 

Fink is the founder and CEO of the world's largest asset manager and is widely held responsible for setting the tone for other firms. 

Last year, he announced that BlackRock was going to switch their investment strategy to only pump cash into projects that had a net zero greenhouse gas emission rate, pulling out of any companies that don't fit that description by 2050.

It terrified the oil and gas industry and southern states, some of which heavily rely on those jobs, and sparked concerns he was more focused on politics than profits.   

Fink, in his letter to stakeholders on Tuesday morning and in interviews since, said  his position wasn't political and that the firm can still be profitable - and will be - while investing in eco-friendly causes.

'We focus on sustainability not because we're environmentalists, but because we are capitalists and fiduciaries to our clients,' he said.  

He also urged CEOs to take similar stances, telling them their voices are 'more essential now than ever'.  

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BlackRock CEO Larry Fink has insisted he is not 'woke' and is still driven by profit

'It’s never been more essential for CEOs to have a consistent voice, a clear purpose, a coherent strategy, and a long-term view. Your company’s purpose is its north star in this tumultuous environment,' he said. 

He claimed BlackRock is not purposefully divesting from oil and gas, and that investing in sustainability will prove profitable.  

In an interview with CNBC's SquawkBox afterwards, Fink doubled down on his position. 

He insisted that his letter wasn't a 'walk back' amid criticism from Republicans, like southern state officials. 

'There is no walk back. I've always said about a corporation and its purpose, and those companies who have a strong purpose are going to have more durable profitability.

'I am just as much as focused on environmental issues as I've ever been. I'm repeating exactly what I said in 2019.' 

On Monday, the state of West Virginia canceled its partnership with BlackRock over its focus on the environment. 

'As the state’s chief financial officer and chairman of the Board of Treasury Investments, I have a duty to ensure that taxpayer dollars are managed in a responsible, financially sound fashion which reflects the best interests of our state and country, and I believe doing business with BlackRock runs contrary to that duty,'  State Treasurer Riley Moore.  

A state press release said: The decision was based on recent reports that BlackRock has to embrace “net zero” investment strategies that would harm the coal, oil and natural gas industries, while in Chinese companies that subvert national interests and damage West Virginia’s manufacturing base and job market.' 

While Fink had used previous letters to announce concrete actions by BlackRock, including the introduction of a tougher threshold for some funds to invest in coal, the dirtiest fossil fuel, campaigners said the latest letter was a missed opportunity.

'There's not much to see here other than more hot air from a would-be climate leader,' said Ben Cushing, Fossil-Free Finance Campaign Manager with the Sierra Club.

'Larry Fink´s latest letter to CEOs is just another rehashing of the same vague rhetoric, without any meaningful new commitment to actually help lead the necessary transition to a climate-safe future.'

Nevertheless, overseeing $10 trillion as of Dec. 31, BlackRock is one of the most influential voices in U.S. and European boardrooms, making Fink's annual letter a must-read.

In Monday's letter, Fink unveiled plans to launch a Center for Stakeholder Capitalism to create a 'forum for research, dialogue, and debate.' 

The center will help to explore the relationships between companies and their stakeholders, he said.

Fink also said that BlackRock is working to expand an initiative for investors to use technology to cast proxy votes.

'We are committed to a future where every investor - even individual investors - can have the option to participate in the proxy voting process if they choose,' he said.

After years of criticism from activists focused on climate and other ESG issues, BlackRock changed course in 2021 and cast a much more critical set of proxy votes such as backing calls for emissions reports or the disclosure of workforce diversity data.

At the same time the fund manager has faced challenges from conservative U.S. politicians. On Monday, West Virginia State Treasurer Riley Moore said his agency would no longer use a BlackRock liquidity fund, where it kept $21.8 million as of Jan. 6.

In a news release, Moore cited BlackRock's dealings in China and noted 'that BlackRock has urged companies to embrace 'net zero' investment strategies that would harm the coal, oil and natural gas industries.'

A BlackRock spokesman declined comment. 

The company in December acknowledged some continued fossil-fuel investment will be needed.