The deadly shooting spree at a South Florida high school shows it’s time for BlackRock CEO Laurence Fink to put his company’s money where his mouth is, says Sen. Elizabeth Warren.
Fink, the head of a firm whose $6.3 trillion in assets make it the world’s largest money manager, warned corporate executives in his annual letter of a growing insistence that corporations “respond to broader societal challenges” and demonstrate that they’re making a positive contribution beyond mere profit.
By leveraging the holdings that BlackRock manages in gunmakers like the American Outdoor Brands Corp., which builds the AR-15 semi-automatic rifle that former student Nikolas Cruz used to kill 17 people at Marjory Stoneman Douglas High School in Broward County, Fla., Fink can demonstrate his own commitment to the standard he set, the Massachusetts Democrat wrote in a letter.
BlackRock is the single biggest investor in American Outdoor Brands, holding an 11 percent stake, and Warren’s letter to the company was one of nine sent to institutional stockholders of weapons manufacturers. The added pressure comes amid the #NeverAgain social media campaign, which has also urged a cross-section of companies doing business with the powerful National Rifle Association to abandon those relationships. Firms from Delta Air Lines to insurance-provider Chubb and car-rental firms Avis and Enterprise have already done so.
While the federal government has yet to make any changes to firearms laws, investment managers like BlackRock, Invesco, and Vanguard have a powerful position from which to urge gunmakers to work for firearm safety improvements on their own, Warren said. BlackRock’s statement that it would “speak with weapons manufacturers” about their reactions to the Florida killings doesn’t go far enough, she argued.
But while New York-based BlackRock’s holdings are large, its gun stocks are controlled through so-called passive funds linked to indexes such as the Russell 2000, which includes three publicly traded gunmakers, rather than hand-picked platforms. That eliminates the option of dropping a stock unless the index itself is redesigned or the client requests it.
“Given our inability to sell shares of a company in an index, even if we disagree with management, we focus on engaging with the company and understanding how they are responding to society’s expectations of them,” said Ed Sweeney, a BlackRock spokesman. “We will be engaging with weapons manufacturers and distributors to understand their response to recent events.”
BlackRock is already working with customers who want to avoid investing in companies that don’t align with their values, using techniques including screens that filter corporations based on environmental, social and governance criteria.
“We currently have more than $200 billion in assets under management for clients in these types of portfolios,” Sweeney said.
Warren recommended BlackRock and its rivals also advocate for gunmakers to take steps such as ensuring merchants set higher minimum-age requirements for purchases or establish mandatory waiting periods.
Gunmakers can “direct company research towards the development of safer weapons and violence reduction,” she added. “They can take additional actions in conjunction with their distributors, retailers, and other business partners. None of these actions would substitute for action by the federal government, but each would help reduce gun violence.”
Despite inertia in the wake of previous mass killings in Las Vegas and Newtown, Conn., lawmakers have faced increasing pressure to act this month from survivors of the high school shooting spree: The teen-agers and their teachers have made television appearances and met with President Trump to highlight their concerns.
Already, Florida Gov. Rick Scott and the state’s Republican legislature have begun working to raise the minimum age for gun sales in the state from 18 to 21.
Trump, who once indicated support for a similar measure but hasn’t reiterated it, is focusing instead on a proposal to arm teachers while maintaining his loyalty to the NRA.
The lobbying group, which has said it backs tighter measures to keep mentally ill people from buying firearms, has reiterated its support of gun rights and sought to refocus the debate. Spokeswoman Dana Loesch said the news media routinely exploits mass shootings to boost ratings, while CEO Wayne LaPierre has worked to cast the issue as a partisan political matter.
Gun-control supporters are fighting “to eliminate the Second Amendment,” the constitutional provision that guarantees the right to bear arms, “and our firearms freedoms, so they can eradicate all individual freedoms,” LaPierre said at the Conservative Political Action Conference.
