Mississippi Secretary of State Michael Watson stop command on Tuesday against asset manager BlackRock, alleging that the company had “repeatedly made false and misleading statements” about environmental, social and governance issues. fox business report.
Wednesday’s report said Watson, along with the Securities Division of the Secretary of State’s office, issued an order “ceasing BlackRock’s alleged wrongdoing and imposing a multimillion-dollar administrative penalty.” press release.
Watson accused BlackRock of misleading Mississippi investors regarding its “involvement in imposing ESG factors on portfolio companies.”
The order stated that BlackRock alleges that the non-ESG “fund does not follow an ESG investment strategy.” Watson claimed this was not true.
The Secretary of State’s press release states, “BlackRock has made multiple statements committed to leveraging all assets under its management to incorporate ESG considerations, including advancing our environmental goal of net-zero carbon emissions. and announced action.” “BlackRock also told its customers that they could achieve better long-term financial prospects and financial outcomes through ESG-backed funds, but there was little or no evidence to support that claim.”
As an example, the order pointed to BlackRock’s work on the Net Zero Asset Managers Initiative.
“BlackRock’s Climate Change Disclosure Report confirms that BlackRock is actively working to meet its NZAM obligations by implementing a ‘sustainable’ net-zero investment strategy across ‘all assets under management’. “It shows that we are.”
The cease and desist order said BlackRock misled ESG investors in Mississippi by promoting the fund as being economically beneficial. Additionally, the company claimed it charged higher fees to ESG funds than non-ESG funds.
“Investment firms will not impose a political agenda on the state of Mississippi, especially through fraudulent or deceptive means,” Watson said in a statement to Fox Business.
“Every citizen should have the opportunity to make informed and educated decisions when investing their hard-earned money. If they don’t, our office will hold these bad actors accountable.” will be pursued,” he added.
BlackRock told Fox Business it is committed to complying with the law “in all respects.”
“Many policymakers and government officials have ideas about how their clients’ assets should be invested,” BlackRock said. “We are obligated at all times to invest in accordance with our clients’ choices, their best economic interests, and applicable law. Our only challenge is to evaluate the risks of the funds in which our clients choose to invest. It’s about maximizing adjusted returns. We operate to the highest standards.” We serve domestic regulated industries and are committed to complying with the law in all respects. ”
Last week, Texas withdrew an $8.5 billion investment managed by BlackRock. Texas State Board of Education Chairman Aaron Kinsey said the decision was based on the asset management company’s “disruptive” ESG efforts. He accused the company of violating state Senate Bill 13, which prohibits “investments in companies that boycott certain energy companies.”
BlackRock responded by calling Texas’ decision to withdraw its investment “reckless” and “irresponsible.” Mark McComb, the company’s vice chairman, said the state was prioritizing “short-term politics over long-term fiduciary responsibility.”
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