On Tuesday, almost 20 states expressed their concerns to top executives of major financial firms, such as Larry Fink from BlackRock and Jamie Dimon from JPMorgan. They urged these leaders to abandon “woke investment” practices aimed at environmental goals if they wish to continue operating within these states.
A letter signed by 26 state finance officials was sent to the CEOs of major institutions like BNY Mellon, Goldman Sachs, Morgan Stanley, Fidelity Investments, State Street, and Vanguard.
The state officials outlined five specific actions these companies should take to demonstrate a commitment to sound financial practices rather than political agendas.
One of the key requests is to avoid engaging in what they labeled an “international political agenda,” which includes obligations related to net-zero climate goals and the EU’s corporate sustainability directive.
The letter criticized the diminishing of “traditional fiduciary duties” in favor of ESG goals—essentially, the environmental, social, and governance priorities that some financial firms have adopted.
While some companies have made steps in a positive direction, like pulling out from global climate coalitions and dialing back on ESG-related rhetoric, the state officials indicated that more efforts are required, as referenced in a copy of the letter obtained.
“Our goal is to ensure that public assets are managed for optimal financial benefit for beneficiaries and taxpayers. We look for concrete evidence that your company’s investment strategies, proxy voting, and engagement methods align with traditional standards,” they stressed in their message.
Interestingly, 21 states, including Alabama, Arizona, and Iowa, have asked these executives to respond to the letter by September 1.
This communication follows Texas’s recent decision to lift a ban on BlackRock, which had been prohibited from engaging with Texas pension and investment funds—valued at about $50 billion—due to its climate policies.
Earlier this year, BlackRock had reassessed some of its environmental goals, stepping away from groups like Climate Action 100+ and the Net Zero Asset Managers Initiative.
However, the firm continues to partake in several practices that restrict fossil fuel extraction, as noted by conservative watchdogs.
While Texas may have eased some pressure on BlackRock, these 21 states are intensifying their demands for financial firms to eliminate ESG objectives.
“We insist that major American financial institutions prove their detachment from the ideology of wokeness with tangible actions before they can access state funds,” stated Oj Oleka, CEO of a state treasurer foundation.
“For far too long, companies like BlackRock have skirted the edges of violating traditional fiduciary obligations, jeopardizing American retirement savings in the pursuit of ESG ideals.”
