Environmental and consumer groups, for example, accuse index managers of shirking their broader social responsibilities, such as by not divesting the shares of fossil fuel companies or by not blocking lavish CEO pay. BlackRock CEO Larry Fink was met by protesters at an October black-tie gala at the Museum of Modern Art, where he sits on the board. (The fund companies say the passive investment model means they can’t divest from companies listed on indexes.) Other detractors say companies may not be competing aggressively because their common owners—the funds that hold them all—don’t want or need them to.
Laurence D. Fink, the founder and chief executive of BlackRock, announced Tuesday that his firm would make investment decisions with environmental sustainability as a core goal. ...
Mr. Fink’s annual letter to the chief executives of the world’s largest companies is closely watched, and in the 2020 edition he said BlackRock would begin to exit certain investments that “present a high sustainability-related risk,” such as those in coal producers. His intent is to encourage every company, not just energy firms, to rethink their carbon footprints.
If Fink means that BlackRock's index funds will divest from fossil fuel companies, that's going to make a huge change in how index fund work. Put bounty, it would eviscerate the very meaning of indexing.
