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Open Letter from BlackRock Inc. : As it has for many people, the recent tragedy in Florida has driven home for BlackRock the terrible toll from gun violence in America. We believe that this event requires response and action from a wide range of entities across both the public and private sectors.

It has put a spotlight on the role of companies that manufacture and distribute civilian firearms. Many of these companies are privately owned, but some of the largest manufacturers and retailers are publicly listed companies and are therefore held in the portfolios of millions of individual and institutional investors around the world.

There are three publicly traded companies in the US whose primary business is firearms manufacturing: American Outdoor Brands, Vista Outdoor and Sturm, Ruger. BlackRock holds none of these firearms manufacturers in our active equity portfolios (where stocks are selected by our portfolio managers within guidelines agreed to by clients). In BlackRock’s index equity products (where stocks are determined by third-party index providers) – these three companies represent 0.01% of total assets.

Because the companies in an index are determined by third-party index providers, when a client chooses an index that includes a firearms manufacturer, we are unable to sell those shares regardless of our view of the company. Within those constraints, we are addressing the issue of firearms companies in index portfolios in two ways:

Offering our clients a choice of products that exclude firearms manufacturers and/or retailers if clients choose to do so;

Engaging with firearms manufacturers and retailers in which our clients are invested regarding business policies and practices as we describe further below.

Offering our clients products aligned with their values

BlackRock manages money for a diverse set of investors, including pension plans, insurers and individual investors, who have a broad set of views on firearms. Over the past two weeks, we have reached out to our clients to help them understand their exposure to civilian firearms companies. We have a continuing dialogue with many clients and are helping them explore their options for altering or eliminating their firearms exposures.

We currently offer our clients mutual funds and ETFs that use social criteria as part of the process for determining which companies are included in such portfolios. These products include the industry’s largest socially responsible ETF, which excludes firearms and other companies. We are also exploring ideas for new funds, including index-based portfolios that exclude just firearms manufacturers and retailers.

Of course, it is our clients’ decision when and how to use these products to achieve their goals. It is their money, not ours.

BlackRock’s approach to engagement

As BlackRock CEO Larry Fink recently wrote in a letter to companies in which we invest as a fiduciary for our clients, “In the $1.6 trillion in active funds we manage, BlackRock can choose to sell the securities of a company if we are doubtful about its strategic direction or long-term growth. In managing our index funds, however, BlackRock cannot express its disapproval by selling the company’s securities, as long as that company remains in the relevant index. As a result, our responsibility to engage and vote is more important than ever.”

We have an obligation to our clients to engage with companies in equity-index portfolios to promote sustainable business practices that can create long-term value.

“To prosper over time,” he wrote, “companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate.”  He went on to say that key to long-term success for companies is “understanding the societal impact of your business” and how it will “affect your potential for growth.”

As part of our corporate engagement, BlackRock regularly speaks with company management and directors to understand their company’s business strategies and their response to changing dynamics in their industry and society at large.

Engagement with civilian firearms manufacturers and retailers

For manufacturers and retailers of civilian firearms, we believe that responsible policies and practices are critical to their long-term prospects. Now more so than ever.

That is why, over the past week, we have reached out to the major publicly traded civilian firearms manufacturers and retailers to engage in a discussion of their business practices. We have already had constructive discussions with some, and we are continuing to pursue our engagement with them all.

BlackRock believes that engagement is most effective and has the greatest potential to drive change when it is done through private dialogue. As is our long-established practice, the specifics of our discussions with individual companies and their responses to us will remain private.  However, below are some of the topics that, depending on the state of our engagement with each company and its policies and practices, we are focused on.

With manufacturers, the topics on which we are engaging, among others, include the following questions:

– What is your strategy and process for managing the reputational, financial and litigation risk associated with manufacturing civilian firearms?

– How do you assess the financial, reputational and litigation risk of the various aspects of your product lines and how each of those products is distributed?

– What steps do you take to support the safe and responsible use of your products?

– How do you determine where you will allow your products to be distributed? (Do your distribution channels include private sales? Do you require distributors to disclose to you warnings received by the Bureau of Alcohol, Tobacco, Firearms & Explosives? Do you monitor whether distributors and retailers of your products have a high volume of their guns identified as having been used in crimes?)

– What strategies do you employ to monitor how your products are being sold? (Do you require retailers to certify that they do background checks? Do you require training of retailer staffs? Do you have a process in place to flag orders of unusual size or identify patterns of disproportionate sales?)

– Are you investing in Research & Development to promote the safety of your products (e.g., effective trigger locking technology)? What is your strategy in this area?

With retailers, the topics on which we are engaging, among others, include the following questions:

– What types of firearms do you currently sell? And what share of your revenue and profit do they represent?

– What is your strategy to manage the reputational, financial and litigation risk associated with selling these products?

– What are your policies and practices for determining to whom you will sell firearms? (Do you set age limits? Do you require background checks and what is the rigor of those background checks?)

– What steps do you take to ensure compliance with relevant laws regarding who may or may not purchase firearms? (e.g., prohibiting felons or domestic abuse offenders from purchasing firearms; sales to minors of certain products; training provided to employees so they comply with applicable laws and regulations.)

– What licensing do you have for your gun sales?

– What other strategies do you employ to prevent the potential misuse of firearms you sell? (e.g., limits on bulk purchases, preventing straw purchases where one person uses another’s identity for a background check) How do you assess the reputational, financial and litigation risk of such misuse for your business?

– What steps do you take to support and promote gun safety education at the point of sale?

In our engagement, we are fundamentally looking to understand whether the company has the appropriate policies and controls in place and is sufficiently managing the risks associated with these issues.

The responses from companies and the strategies they employ will vary given the variety of companies. Dick’s Sporting Goods, for example, announced that it will no longer sell assault-style rifles and that it will no longer sell firearms to anyone under 21 years of age.  Walmart and Kroger separately announced that they will raise the age requirement to 21 years of age for purchasing firearms and ammunition at their stores. We will monitor these and other companies to assess their policies and practices in light of evolving societal expectations.

Proxy voting

Our corporate engagement is just one step in our investment stewardship related to these companies.  Another key aspect of investment stewardship is voting on specific proxy proposals and on the election of a company’s directors.  BlackRock casts these votes based on what we determine to be the best long-term interest of our clients.

Given BlackRock’s size, we are often a large investor in most public companies – though not a controlling shareholder.  As a result, we cannot dictate what a company should do, nor is it our place to do so.

We encourage company management and directors to enter into engagement conversations directly with our investment stewardship team so that we can develop a well-informed view of their company in advance of proxy voting. Based on our engagement conversations and our long-term view of the company, we may vote against specific directors or we may vote against management on shareholder proposals.

Engagement is a long-term process. Yet this is an issue of tremendous urgency and we are bringing, and will continue to bring, a sense of urgency to our engagement efforts in this area.

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  1. *Yawn* They are there to make themselves and their clients money. The number of people who invest based on political values instead of returns is a tiny minority. They are free to do what they want. It will make zero difference.

    The second people invest based on morals is the second everyone dumps Apple and Amazon.

  2. Yeah, I’ll listen to a PEG on life advise. Give me a fucking break. How about ETF’s with Pharama exposure, specifically the company that makes oxi… where is their moral high ground there?

    • What’s wrong with making oxi? It’s a product with a specific niche. If you ever need such a drug you’ll be damn glad it exists. If people abuse that product that is not the manufacturer’s fault. It’s addictive. So what? So is coffee, alcohol and just about everything else under the sun. People get addicted to running FFS.

      The whole concept of a “…socially responsible ETF…” is nothing more than a sales pitch to the weak-minded fools who are prone to having “feelz” or “getting a tingle up their leg”. But hey, if it makes money, go for it. If it ain’t fraud then I’m all for parting fools from their money or making them more money or whatever.

      • (Oxi)

        “If you ever need such a drug you’ll be damn glad it exists.”

        Preach it.

        *Pray* you never require a time-release opiate just to sleep. Or to simply get through a day without seriously contemplating suicide.

        Because *that’s* what life in constant physical pain consists of…

        • I’ve never had that kind of a problem but I have had oxi, short term, post surgery and… yeah, it’s a great drug if it’s used as intended.

          I can’t imagine requiring it long term. I’ve known people who are in that position and… watching them day in and day out is gut wrenching. When they talk about considering ending it all it’s hard take but it’s damn well understandable when you see what they go through every day.

          If you are in or have been in that situation Geoff then I am truly sorry to hear it. As stupid, hollow and perfunctory as it seems to say I really do hope that you recover fully and with the utmost speed.

        • It’s 5:30 in the morning and my bones can’t wait till the pain meds kick in.

          I can barely walk to the coffee pot.

          Arthritis doesn’t seem to get better with age.

        • Oxi is just another synthetic drug made to replace the natural poppy products. Since it is a synthetic, it takes longer to leave your body, God help you if you get dependent on it. Codeine, with or without emprin, acetaminophen, or aspirin, worked just as good as the newer stuff. Big Pharma wants the US to go to synthetics so they can make mo’ money.

      • I think the commenter was just stating that, if manufacturers are held to account for the misuse of their products, the manufacturers of opioids would be at greater risk from liability (and, therefore, a risk to investors) than the firearms industry.

        I think it is probably unconstitutional to hold a company responsible for the misuse of their products by fools and/or outlaws.

        Niether the firearms nor pharmaceutical industry is akin to the tobacco industry (despite the desires of the leftists). Unlike tobacco, the appropriate use of both firearms and pharmaceuticals produce results beneficial to the individual and society.

    • Oxicontin isn’t the problem – it’s Chinese made Fentanyl that drug abusers are taking and killing themselves with.

      The media & politicians have muddied the water and just blamed Opioids instead of pointing fingers at the real culprits.

      What’s worse is that ePackets from China are virtually guaranteed to be delivered via the US Postal Service – AND – we (taxpayers) are subsidizing said ePackets! We pay more to ship an equal sized package domestically than Chinese customers do to send packages to American destinations.

      Congress did a study on it that was published in January. They know Chinese Fentanyl is the main culprit, but are punishing people with chronic pain regardless. You can read it here:

      Other links:

  3. I don’t expect rich white male bankers to question where their bank armed guards got their firearms from.
    The best way to deal with this is for a gun guy or girl stock holder in the bank, to do what Charleston Heston did when he quoted Ice T in his rap music at a stock holder meeting for a record company.

    Ask the bankers if they will remove the armed guards at all bank locations? Or will they stop using armed escorts for themselves and their families? My list of questions would very be embarrassing.

  4. “Gee my stock portfolio only earned 1% returns last year, but at least I only invested in socially conscious companies” said no one ever. Are there any companies out there still run by businessmen and not by SJW diversity hires?

  5. An investment company, advisor, broker, fiduciary, whatever knows which companies are in a portfolio, including and index and/or index fund. The investment manager/company can vote or present questions to the company at annual meetings. The business lines of every portfolio company are known. Social Justice Investors know that any company with a firearms and/or ammunition line of business are unlikely to be satisfactory investments. It is highly unlikely that any SJI is interested in the business practices or policies of any publicly traded company engaged in firearms and ammunition, insofar as those companies declare that while being unacceptable investments, those companies are taking measures to become unacceptable while maintaining an unacceptable line of business.

    In short, Blackrock is merely virtue signaling, and deserves all the respect that garners from people living in the real world. Firearms/ammo businesses included in Blackrock SJI vehicles should reply to Blackrock, “We do not take seriously any computer created junk mail.”

    • If they want to take that ‘social justice’ investing to its natural end, they should require every one the company’s employees to submit sworn affidavits as to their commitment to ‘social justice’ at home. Do they drive CO2-belching fossil-fuel vehicles to work? Only have 1 one child to fight over-population?

      Etc, etc, etc. there’s no end to that insanity…

  6. They obviously believe that there is some market for “socially responsible ETF’s”. If so, let them make money from them. If it ends up being a silly venture then let them lose money on it.

    It’s their business. They can run it any way they want. Personally, if I had money with them I’d say “Make me some motherfucking money and don’t give me “socially responsible” excuses for failing to do so”.

    That said, if someone said “I’m willing to get less return on my investment provided you can show me that it’s “socially responsible” but you can keep earning the same fee on that investment as you would if it produced a higher return” then I would expect Blackrock to take their money with a smile and provide what the customer requested.

    I mean hey, if someone is dumb enough to walk into a high end restaurant, sit down, look at the menu, order the filet mignon for $55/entree and then request it be cooked “well done”… that’s their problem not mine. But I would fully expect the restaurant to provide it to them in a timely manner and then charge them the full amount for it.

  7. Perhaps BlackRock should increase its holding in Dickless Sporting Goods. The two companies are made for each other.

  8. Umm…yea, there’s a law for all this crap already. Do they expect that no one is following law? What distributor “distributes” to private parties? And…

    …preventing straw purchases where one person uses another’s identity for a background check…

    That’s not what a straw purchase is…that would be identity fraud.

  9. “Offering our clients products aligned with their values.” I wonder if I can contact them tomorrow and request products and funds that only support traditional marriage, pro-life, and Christ-centered companies? What about funds and products focusing on sompanies that are strong defenders of the Constitution of the United States of America? I’m suuuuure they offer products that represent my social consciousness. Not.

    • ” I wonder if I can contact them tomorrow and request products and funds that only support traditional marriage, pro-life, and Christ-centered companies”?

      All two of them, Chick-fil-a and Hobby Lobby?

  10. I don’t think Blackrock realize, contrary to Hollywood representation, that firearm manufacturers and dealers are among the most regulated industries and those industry know what happens if you are remotely even suspected of breaking the rules. An F-Troop audit is not a fun thing to experience.

    There will be those who play fast and loose but they don’t tend to be in business for long or ended up with an extended stay at Club-Fed.

    • No shit, FINRA regulated industries are the wild west compared to fire-arms sales. Could you imagine if they treated FFLs like they do banks when banks bilk people out of billions of dollars?

      Remember when they got caught rigging the FOREX market and nobody went to prison? Good times.

  11. “Offering our clients products aligned with their values“

    Imagine if a conservative company did that. Oh yeah, they did, and were sued in federal court.

  12. hey BlackRock?

    if that money they earn for you is too dirty for your snowflake values?…then pass it all over to me

    AS I don’t fuc–en care where my money comes from!

  13. Your job is to make me as much money as possible, not to promote an agenda. Also they should just go by Rock, as Black Rock is too scary.

  14. I made a petition on that has made them upset. I posted a pro-2nd Amendment petition on their site. Please go to link and endorse it if you fell like it after you read it. They want to take it down as they state at the top of it, but that would infringe on our 1st Amendment rights. Copy the link and send to friends also if you feel like it.

    Are there any other online petitions we could start to help us out with pro-2nd Amendment.

  15. The petition web site has a lot of pro-2nd Amendment petitions that need people to view and sign if possible. Please help save our 2nd Amendment rights. Look at these and decide which to sign. There are too many to link here.

    A lot of anti-2nd Amendment petitions are post there also.

  16. From the questions that S&W responded to, Blackrock has no clue as to current gun laws or how the manufacturer works through federally licensed dealers. Kind of like asking the guys in Detroit if they are aware of folks causing fatal accidents due to inattention or those who are killed due to drugs or alcohol. Or how many senior citizens are killed due to poor reflexes while driving.

    Pure emotion devoid of facts.


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