Big Investors Have Clout. They Can Use It With Gun Makers.

Wednesday, March 7, 2018

Over the past several weeks, there has been a lot of talk about investors ridding themselves of their shares in gun manufacturers and retailers after the school shooting in Parkland, Fla. A number of public pension funds, like those in the state of Connecticut, have discussed the prospect of selling their shares.

But here’s a counterintuitive idea: Use those stakes in the gun industry to encourage reforms.

That’s what Larry Fink, chairman of BlackRock, the largest investor in the world, has the opportunity to do — if he is true to his word about holding companies accountable to “not only deliver financial performance, but also show how it makes a positive contribution to society.”

Mr. Fink repeated those words to me last month when I wrote a column about a letter he delivered to the world’s top executives in January, pressing them on social responsibility.

Well, it turns out that Mr. Fink’s firm is one of the largest owners of gun manufacturers in the country. It wasn’t a conscious choice by BlackRock; because BlackRock is the largest index investor in the world and gun makers are included in various indexes, it owns large stakes in American Outdoor Brands; Vista Outdoor; and Sturm, Ruger by default. None of its actively managed funds — in which a manager actually decides to make investments in a particular company — has a stake in a gun manufacturer.

Photo courtesy of Pablo García Saldaña.

Source: New York Times (link opens in a new window)

ESG, impact investing