The world's largest asset manager will exclude gun manufacturers and retailers from its newest investment products
Scott Olson/Getty Images
- BlackRock, the world's largest asset manager, is offering new investment products that exclude gun manufacturers and retailers.
- It has been in discussions with these companies since March, in the wake of the fatal Parkland high school shooting.
- The decision is directly related to BlackRock CEO Larry Fink's declaration in January to only do business with companies that are taking into account their impact on society.
- This post is part of Business Insider's ongoing series on Better Capitalism.
BlackRock, the world's largest asset manager with roughly $6.3 trillion in assets under management, is taking an active role in America's gun debate. And its clients will soon have more gun-free investment options to choose from, including retirement plans.
In a statement released April 4, BlackRock announced that in response to customer demand, it would offer two new exchange-traded funds (ETFs) and a line of pension plans that do not include companies that manufacture or sell civilian firearms.
It will also remove gun manufacturers and retailers that make either 5% or $20 million of total sales from gun-related purchases from its existing Environmental, Social and Governance (ESG) ETFs (i.e. those that include companies with a socially conscious strategy), though these gun manufacturers and retailers have accounted for a very small portion of these funds.
BlackRock also announced it would be reducing annual fees for its two flagship ETFs.
That means it will now be easier for BlackRock customers to avoid investing their money in guns. The move will also make investing in companies deemed socially conscious a more attractive choice.
BlackRock said in March that it would be making more gun-free investment options available to clients, and would be holding discussions with gun manufacturers and retailers, with an emphasis on evaluating the types of products being offered and how they are distributed to consumers.
These decisions are not isolated to the Parkland tragedy, but are part of BlackRock CEO Larry Fink's highly influential declaration in January that his company would now only invest in companies that can adequately outline their long-term plans for value creation - as opposed to maximizing profits quarter to quarter - and that are working to have a positive impact on society.
BlackRock is not ending all ties with gun manufacturers and retailers but is instead urging them to consider their role in the US's gun violence problem. An example of such a move is how Dick's Sporting Goods (which is one of the excluded companies in BlackRock's new offerings), stopped selling guns and ammunition to people under 21 beginning in late February, and no longer sells assault weapons.
"Society is demanding that companies, both public and private, serve a social purpose," Fink wrote in his January letter. "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate."
- India's GDP growth surges to 8.4% in Q3, 2023-24 growth rate pegged at robust 7.6%
- Fiscal deficit at Jan-end touches 63.6% of full year target: Govt data
- Cabinet approves 3 semiconductor fab units, to generate 80,000 jobs
- RIL shares climb nearly 1% after announcing mega merger
- Key infra sectors' growth slows to 15-month low of 3.6% in January