Former Blackrock executive sheds doubt on sustainable investments
Tariq Fancy does not believe in the long term value of sustainability.
Justin Wong (JW)May 8, 2025
A high-profile newspaper article by a former BlackRock Inc. (NYSE: BLK) manager challenged the value of sustainable investing in solving problems and prompted other industry analysts to defend the role of funds targeting environmental, social changes - and governance policies (ESG) of companies. Many ESG funds have almost no leverage and create a placebo effect to delay the overdue government regulatory reforms we need "to address issues like climate change," said Tariq Fancy, BlackRock's former chief investment officer for sustainable investing , in a phone interview on Friday. But ESG specialists fired back to defend the sector. "Fancy provides only the sketchiest evidence to support a pretty hair-raising position," Jon Hale, an analyst at Morningstar Inc, wrote on Medium.com on Friday. For example, Fancy wrote in his article that funds are often renamed "green" with few major changes. Hale said he counted 64 reallocated US funds, all of which have made noticeable changes to their investment approaches, although he acknowledged there "could easily be some greenwashers" elsewhere. The debate comes at a time when US regulators are trying to crack down on firms that are overstating their ESG benefits while money is pouring into the sector. Fancy's remarks echoed points he made in an opinion piece for USA Today on March 16 accusing the financial industry of "washing the public green". A spokesperson for BlackRock said the company contradicts Fancy's view, saying that sustainable investing "can deliver strong returns on investment while helping to address pressing social and environmental concerns." BlackRock "strongly supports" efforts to establish standards necessary to counter the risk of greenwashing, he said. Fancy, 42, joined BlackRock in early 2018 and stayed until September 2019 when he said he was leaving the company because of a death in his family. He returned to Toronto to lead a technology nonprofit that he founded, the Rumie Initiative. Although he had already decided that ESG investing had little impact, Fancy said he was more concerned as the COVID-19 pandemic spread, showing that government power was necessary to enforce global action. He was made to write, according to Fancy, after BlackRock CEO Larry Fink was asked by a Bloomberg interviewer in January whether tighter government regulation was necessary. "I prefer capitalists to regulate themselves," said Fink. That position, and the marketing of BlackRock and other firms, convinces people that a strong government response is not necessary, Fancy said. But portfolio managers are focused on and judged on financial returns, not social improvement. Fancy said in a follow-up email that his time working to bring ESG investing ideas into the mainstream "gave me a unique perspective and was a blessing and a curse." “The truth is that the investment industry is filled with good, decent people who want to do the right thing in many cases, but their hands are tied to the bottom line. They are legally bound and have a financial incentive to take profits above almost anything else ask, "said Fancy.
