Investment fund managers and banks are key players in the energy transition due to their role as financiers of companies. However, they have been repeatedly criticized by environmental associations and by supervisors for moving slowly in their divestments and the end of financing for the most polluting sectors. Banks and managers have responded, in recent years, with ordered calendar announcements to exit fossil fuel-based activities. But now the criticism is coming from the extreme right, which accuses the financial sector of playing politics with its ecological transition messages.
This fact has reached Spain. vox has presented this Thursday a non-law proposal in Congress that calls for legal changes so that financial institutions cannot use personal data and customer profiles to offer 'green' banking services. The far-right formation accused the Spanish banks of doing climatic "proselytism" and "actions of a political nature." With this, they say, "ideological or social indoctrination" is being carried out.
Vox's speech was included in a package of petitions, also to the big technology sector, to defend "national and personal sovereignty" of data. Inés Cañizares, deputy spokesperson for the party in Congress, was in charge of presenting this proposal, accusing the banks of taking advantage of the data of their clients and card payments. "It can lead to the banks knowing and controlling all our movements," she pointed out, against the greater use of the card. With these data, she defended: "They bombard their clients without their asking for it."
Among other measures, Cañizares criticized that banks inform their clients about the carbon footprint in their mobile application. It is an idea that is not new in the banking sector, but that has been gaining ground in recent years and that consists of providing information to the client on what use the bank makes of that money and what impact it has on the environment. For Vox, these measures can end up in "black lists of users who have a combustion vehicle or airplane travelers."
The far-right's attack on the financial sector for its attempts to adapt to the ecological transition is not unique to Spain. Vox's parliamentary initiative has coincided in a few days in which the world's largest investment fund manager, Blackrock, suffers a campaign organized by members of the United States Republican Party for their messages to companies to expand their green policies. It all started two weeks ago, when the State of Texas singled out the manager and nine European financial groups for "boycotting" energy companies with their ESG policies —acronym for environmental, social and corporate governance.
Blackrock is a manager that has shares in most of the big companies in the world. However, despite his actions in these companies, he is never involved in direct management and does not participate in the boards of directors. Although her CEO, Larry Fink, is considered one of the most influential faces in the markets around the world. Fink regularly publishes letters to the rest of the CEOs, which in many cases set the agenda. In recent years, he has incorporated ecological transition messages and has encouraged voting at shareholders' meetings against directors and companies that do not move in that direction.
The Republican party, just as Vox is doing, is installed in climate change denialism and has put Blackrock in its sights for these ESG policies. Prosecutors from 19 states, all of them Republican, sent a letter to the manager a few weeks ago accusing her of prioritizing "activism" over her fiduciary duty to her clients. Among the businesses that Blackrock has, is the management of money from public employee pension funds in the US and some states such as Texas or Arizona are threatening to withdraw the money of their officials from the funds of this manager, as reported by the Financial Times. In Florida, for example, it has been prohibited to include ESG perspectives in the management of public worker pension plans. "The ESG movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interests of their shareholders or their customers," said Glen Hegar, controller of accounts for the State of Texas.
The manager has had to confront this movement in the Republican party, pointing out that it is false that Blackrock is boycotting any sector. "Climate change is testing the resilience of many industries and companies. As prudent risk managers and asset managers for our clients, it is imperative that we seek to understand and assess these risks and opportunities that will affect the companies in which we invest" , he pointed out in a statement collected by the aforementioned economic newspaper.
"The politicization of state pension funds, the restriction of access to investments and the impact on the financial returns of retirees is not consistent with that duty to act in the best interest of the people they serve," Blackrock added. about Texas's threats to withdraw money from its officials.
Blackrock is thus situated at an intermediate point in which it does not satisfy the American extreme right, which accuses it of going against national businesses such as oil, but neither does the environmental groups, who consider that it does not turn its words for the transition into deeds. ecological. These groups, for example, have lamented that Blackrock has reduced the favorable votes in shareholders' meetings to proposals against climate change. It has only supported 24% of the time, compared to 43% last year. The fund considered that the proposals that sought to dictate the calendar in the transition of the companies did not take into account the new situation opened by the war in Ukraine. Blackrock, like its competitor Vanguard, increased its positions in polluting sectors in 2021 despite its commitments.
The 'greenwashing' of the financial sector has been warned not only by environmental organizations but by organizations such as the ECB. Banks and funds have been establishing calendars to reduce their carbon footprint in their activity and investments during this decade. Although there are multiple studies that indicate that investments by the financial sector in the coal sector have not been reduced since the Paris Summit, with the exception of 2020 and the brake due to the pandemic. In addition, they have pointed to the contradiction that in many cases these commitments, with alliances for 'zero' emissions, contrast with the fact that oil and gas are not included.
Despite these criticisms, the extreme right has already presented its battle against the financial sector for its advances towards policies that take the environment into account.