BlackRock Investing & Chip Ethics

I sadly don’t think that any one user can make a difference on this, but I wanted to put my voice out there and see what comes back - specifically on Chip being involved with BlackRock as an investment partner.

Blackrock is indeed the largest investor in the world. But despite pledges to decrease investment in polluting sectors, they are still one of the world’s largest funders of coal power plants and have yet to make any major policy changes internally to match their carbon-zero statements. Their track record on the environment, and particularly their impact on indigenous communities, has often been catastrophic. There are entire NGO coalitions dedicated to exposing and fighting the damage their investments cause, and in 2020 a survey of BlackRock asset managers found:

" Only 28% of 75 asset managers surveyed by ShareAction have made a pledge to engage or exclude companies that fail to act in line with United Nations or International Labour Organisation frameworks for [human rights and labor rights](https://shareaction.org/wp-content/uploads/2020/05/ShareAction-Human-Rights-Report-2020-Final.pdf)."

(https://www.bloomberg.com/news/articles/2020-05-14/fund-managers-fall-short-on-protecting-human-rights-report-says)

I’ve been an investor in Chip - albeit a small investor - since the first angel round of investment, and to date I have continued to contribute a small amount with every round of investing. This is because I believe in the product, and it has a positive impact on my financial future. However, for ethical reasons I will not use the investment function on the Chip app for as long as it is connected to BlackRock, and in the long-term I will need to question any ongoing usage of the app, despite my investments.

My question to the community, and to Chip itself, is then - are there any other options you can pursue? Ethical investors, or entities that do not have a chequered history of destroying habitats and lives? And is anyone else reacting in a similar way?

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I think this is where the ESG funds will come in.

Actions speak louder than words, and if that’s where investors put their money, Blackrock and others will follow.

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Hi There,

Just jumping in to clear a couple of things up and be super transparent - we are working with BlackRock insofar as they are providing the initial funds for our platform. There is no commercial relationship they do not pay Chip to offer the funds. From a regulatory point of view Chip will be acting only as an execution only platform - we do not provide advice on the suitability of funds for an investors financial or ethical considerations.

That said, we are also not wedded to one provider, we have had conversations with an array of different providers (Vanguard, Fidelity, Invesco etc) and will continue to add funds as we grow the platform.

BlackRock are the largest asset manager in the world but are also one of the most innovative (especially around ESG) and working closely with them allows us to open up investing in incredible themes through the addition of ETFs/other funds, focused on ESG issues.

We will be adding ESG options to our offering very soon after launch to improve the product suite - I was wondering if you have any preference on which fund manager you would consider investing with? We have a relationship with Triodos Bank, and could look to offer their funds?

Once the product is launched and working we will continuously be monitoring the data and feedback as well as working with a breadth of asset managers to ensure we have products that cater to all of our investors’ needs.

Thanks

Paul

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Hi Paul,

Thank you for your message.

I understand that Chip is not obliged to provide advice on the suitability of funds for investment from any perspective - be it financial or ethical. However, through watching this platform grow my hope was that the company would choose not to engage with funds such as BlackRock - particularly considering the fund is renowned not just for its size, but for its failings to date on the environment & human rights. Indeed, I would hope that the answer to my question would not include that you don’t have a regulatory obligation to offer that advice!

I will need to put some thought into this myself - staying with Chip or not - in which this is one factor (another being the 1.25% interest fee coming down to 0.89 according to another thread, which I need to understand more about in any case). In terms of practical steps though - yes - funds with a better track record like Triodos, or I believe Roboco often scores at the highest levels of ethical investment are out there, and I’d hope that Chip considers them before continuing with Blackrock (Fidelity/Invesco are just as bad according to https://shareaction.org/research-resources/point-of-no-returns/ , with Vanguard close to one of the most unethical funds).

In the end though I made an assumption on how Chip would engage with ethical funds - which was a mistake on my part - but a disappointment nonetheless. However, wouldn’t positioning Chip as an ethical investor be a great selling point? Attract more users than any risk generated? And more enthusiastic ones at that?

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Hey,

Personally I think it makes sense to start with large investor (fidelity, blackrock, iShares, Vanguard etc).
If Chip went with funds provider that only provided ESG investment choice, that would probably leave many unhappy customers (including me). It is all good to be ESG company but not very sure on the selling point. Chip’s main selling point is to help save money (so type of funds this money goes in to may not be that relevant).

I think many investors are focusing on impact of various companies on environment… so if that trend continues people will buy only funds specific to that. I wouldn’t like it if Chip restricted the availability of funds.

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