The decade's most triggering comedy
The connection between the lawmaker and the asset management company was noted by the American Accountability Foundation, a non-profit government oversight and research organization, after Schumer rebuked efforts to scrap a Labor Department rule that would allow retirement fiduciaries to allocate funds in accordance with the environmental, social, and corporate governance movement, also known as ESG. Both the House and Senate passed a resolution opposed to the rule, which President Joe Biden is expected to veto.
BlackRock is a leading proponent of the ESG movement, which critics say mingles political and social causes such as decreasing carbon emissions and achieving racial diversity in a manner that compromises or distracts from profitability. Schumer nevertheless accepted $103,950 from individuals associated with BlackRock and $10,000 from a political action committee controlled by the company, according to data compiled by OpenSecrets.
“ESG opponents are trying to turn it into a dirty acronym, deploying attacks they’ve used for elements of a so-called woke agenda,” Schumer said on social media this week as the resolution moved through Congress. “They call ESG wokeness. They call it a cult. They call it an incursion into free markets. I say ESG is just common sense.”
Candidates from both parties benefit from BlackRock money, with Republicans getting $639,000 and Democrats getting $453,000 in the most recent midterm election cycle. Sen. Lisa Murkowski (R-AK) and Sen. Raphael Warnock (D-GA) were the second and third-largest individual recipients of funds from BlackRock and individuals associated with BlackRock.
A previous Labor Department rule established by the Trump administration prohibited retirement fund managers from “selecting investments based on non-pecuniary considerations” and required them to “base investment decisions on financial factors” alone. Under the new rule from the Biden administration, which reverses the prohibition on ESG investments for retirement fiduciaries, investment managers are allowed to weigh “the economic effects of climate change and other ESG considerations” as long as they are relevant to a risk-and-return analysis.
Members of the House voted 216-204 in favor of a resolution to scrap the rule, while members of the Senate approved the resolution 50-46. Sen. Jon Tester (D-MT), Sen. Joe Manchin (D-WV), and Rep. Jared Golden (D-ME) voted with Republicans to advance the measure, which was introduced by Sen. Mike Braun (R-IN) and Rep. Andy Biggs (R-AZ).
Schumer meanwhile contended in an opinion piece for the Wall Street Journal that Republicans are inconsistent with their own principles by opposing the new rule. “Republicans talk about their love of the free market, small government and letting the private sector do its work,” he wrote. “But their obsession with eliminating ESG would do the opposite, forcing their own views down the throats of every company and investor. Republicans would prevent investors from adapting to the future, for their own good and the good of the country.”
Schumer also asserted that ESG investments “minimize risk and maximize their clients’ returns” and are used by “America’s most successful asset managers and financial institutions.” The claim occurs after ESG funds suffered amid last year’s underperformance in the technology sector, which ESG managers tend to favor because of their emphasis on corporate social responsibility, and overperformance in the energy sector, which ESG managers tend to shirk because of their avoidance of industries with heavy carbon emissions.
BlackRock’s assets under management declined from $10 trillion in the fourth quarter of 2021 to $8.6 trillion in the fourth quarter of 2022, according to the firm’s most recent earnings report. Executives introduced the first mass layoffs at BlackRock in four years.