'That is not capitalism, that is abusing the market:' Sen. Ted Cruz blasts BlackRock's Larry Fink's 'woke' ESG policies

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Sen. Ted Cruz (R-TX) speaks during a quality league astatine the U.S. Capitol October 6, 2021 successful Washington, DC.

Alex Wong | Getty Images

Sen. Ted Cruz blasted BlackRock CEO Larry Fink connected Tuesday for alleged "woke" concern decisions — and suggested wealth managers similar Fink beryllium barred from voting connected behalf of different investors "to beforehand their ain governmental interests."

"Because that is not capitalism, that is abusing the market," Cruz, R-Texas, charged during an interrogation with CNBC's "Squawk Box."

During overmuch of the interview, Cruz blamed the White House's policies for the surge successful state prices since President Joe Biden took bureau successful January 2021.

But the legislator besides took purpose astatine Fink, whose institution is the world's largest plus manager, and different CEOs, who helium argued person moved distant from focusing connected expanding profits for shareholders to taking stances connected societal issues similar clime alteration to curry favour with affluent liberals.

Fink highlighted clime alteration arsenic a occupation facing corporations successful a 2020 missive to CEOs of the companies BlackRock has invested in. "Climate alteration has go a defining origin successful companies' semipermanent prospects," Fink wrote. "I judge we are connected the borderline of a cardinal reshaping of finance."

Cruz connected Tuesday repeatedly invoked what helium called Fink's enactment of ESG — environmental, societal and governance issues — successful assorted shareholder votes.

"Does Wall Street besides carnivore immoderate of the responsibility? Absolutely," Cruz said, referring to the mean terms for regular unleaded gasoline topping $4.70 per gallon.

"There's a Larry Fink surcharge, each clip you capable up your tank, you tin convey Larry for the monolithic and inappropriate ESG pressure," Cruz said.

He aboriginal said, "What Larry Fink is doing has been unprecedented, successful the emergence of ESG."

"And I deliberation determination is simply a existent occupation with radical who are investing, who are voting shares of passively invested funds," Cruz said, referring to funds that put successful companies belonging to assorted banal indexes.

"Larry Fink is not utilizing his ain wealth to ballot arsenic a shareholder," Cruz said. "What Larry Fink is doing is taking your shares and my shares and millions of small aged ladies who've invested successful funds, and he's aggregating that immense magnitude of superior and he's decided to ballot not to maximize their returns, due to the fact that seemingly his fiduciary work to customers is not a apical priority. He's voting alternatively connected his politics."

Cruz said Fink had "decided that he's much welcomed astatine the 'New York Country Club' erstwhile helium walks successful and has stood against lipid and state adjacent if it reduces the returns of the accounts he's managing, and adjacent if it's destroying jobs, helping America's enemies, and hurting America."

He said wealth managers who ballot connected shareholder matters based connected their governmental interests alternatively of investors request much scrutiny.

"That is not capitalism, that is abusing the market," the legislator said.

A BlackRock spokesman, erstwhile asked astir Cruz's comments, said successful an email, "The lone docket driving BlackRock's proxy voting is the semipermanent economical interests of the millions of radical whose wealth we manage."

"And we judge clients should besides person the enactment to take for themselves however their proxy votes are cast," the spokesperson said. "We pb the manufacture successful providing proxy voting choice."

"Today, astir fractional of our scale equity assets nether absorption – including pension funds serving much than 60 cardinal radical — tin take however their proxy votes are cast," helium said.

"While that is an manufacture first, we spot it arsenic conscionable a start.  We are pursuing exertion and regulatory solutions to grow voting prime for adjacent much clients. Index investing has been the driving unit successful democratizing investing for millions of Americans, with little outgo and greater choice.  We're committed to democratizing proxy voting too." 

In January, successful his yearly missive to CEOs, Fink wrote, "Stakeholder capitalism is not astir politics. It is not a societal oregon ideological agenda. It is not 'woke.' "

"It is capitalism, driven by mutually beneficial relationships betwixt you and the employees, customers, suppliers, and communities your institution relies connected to prosper. This is the powerfulness of capitalism," Fink wrote.