Strive founder Vivek Ramaswamy celebrated BlackRock backing down on Tuesday from supporting certain climate change proposals that “micromanage” companies, calling it an “early impact” of his new firm.
The new asset management company — which will prioritize “excellence capitalism” over the progressive “stakeholder capitalism” model favored by large competitors like BlackRock, Vanguard, and State Street — encourages portfolio companies to pursue maximizing profits for shareholders.
“Last night: we launch Strive to compete with BlackRock by focusing companies on excellence over politics. Tonight: BlackRock announces it won’t support climate change shareholder proposals that ‘micromanage companies,’” Ramaswamy, a former pharmaceutical CEO, tweeted on Tuesday. “Glad to see the early impact.”
Last night: we launch Strive to compete with BlackRock by focusing companies on excellence over politics.
Tonight: BlackRock announces it won’t support climate change shareholder proposals that “micromanage companies.”
Glad to see the early impact.https://t.co/AnFZv7xjSl
— Vivek Ramaswamy (@VivekGRamaswamy) May 11, 2022
Indeed, BlackRock — the world’s largest asset manager — is “likely to support proportionately fewer” environmental and social shareholder proposals “this proxy season than in 2021, as we do not consider them to be consistent with our clients’ long-term financial interests,” according to a note from BlackRock’s Investment Stewardship team, CNBC reported.
“This includes those that are unduly prescriptive and constraining on the decision-making of the board or management, call for changes to a company’s strategy or business model, or address matters that are not material to how a company delivers long-term shareholder value,” the note explained.
“It’s going to be hard for BlackRock to put the toothpaste back in the tube,” Ramaswamy commented on Twitter.
In an interview with The Wall Street Journal earlier this week, Ramaswamy explained Strive’s approach by saying, “We will tell oil companies to be excellent oil companies and coal companies to be excellent coal companies and solar companies to be excellent solar companies.”
Ramaswamy said that he has secured $20 million in financial backing. The Journal reported that PayPal co-founder Peter Thiel and Pershing Square Capital Management CEO Bill Ackman are among the financiers.
“A majority of Americans want companies to stay out of politics,” Ramaswamy continued. “They want to have a separate space for where they shop, where they work, and where they invest from the places where they cast their ballots or engage in their political debates.”
BlackRock, State Street, and Vanguard — which handle a combined $21 trillion in assets and hold, on average, a 20% stake in every Fortune 500 company — run on the model of stakeholder capitalism, which claims that everyone in the “community” has a say in how a company’s activities impact issues such as climate change and minority board seats. The approach argues that for the sake of a greater social good, corporations must be involved in causes that may have nothing to do with their businesses — whether it benefits their shareholders or not.
However, Ramaswamy said in a recent CNBC interview that ESG — one of the progressive investment philosophies that pushes “social responsibility” in addition to profits — has no track record of success. “There’s no evidence that ESG outperforms, despite the claims made by some of the world’s largest asset managers and their CEOs,” he argued.
Ramaswamy, the author of “Woke, Inc: Inside Corporate America’s Social Justice Scam,” explained in an op-ed last year that both liberals and conservatives are duped by large firms’ tactics — the former by their “love of woke causes,” and the latter by their belief that “the market can do no wrong.”
“This new woke-industrial Leviathan gains its power by dividing us as a people. When corporations tell us what social values we’re supposed to adopt, they take America as a whole and divide us into tribes,” Ramaswamy wrote. “That makes it easier for them to make a buck, but it also coaxes us into adopting new identities based on skin-deep characteristics and flimsy social causes that supplant our deeper shared identity as Americans.”