Wealth management firm BlackRock criticized Texas’ decision to cancel an $8.5 billion investment this week as “reckless” and “irresponsible.” fox business report.
On Tuesday, Texas Education Commissioner Aaron Kinsey announced that the state’s Permanent School Fund, which supports public schools, will make a multibillion-dollar investment in BlackRock because of BlackRock’s environmental, social, and governance efforts. announced that it would be withdrawn.
In 2021, the state passed Senate Bill 13, which bans “investments in companies that boycott certain energy companies.” Texas State Comptroller Glenn Hegar last year accused BlackRock of being one of several investment firms “playing politics” over Americans’ retirement savings by boycotting fossil fuel energy companies. It was reported that
“The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by protecting and increasing the approximately $1 billion in annual oil and gas royalties administered by the Texas General Land Office,” Kinsey said. said. “Terminating the agreement with BlackRock ensures that PSF is fully compliant with Texas law.”
“BlackRock’s dominant and persistent leadership in the ESG movement is doing untold harm to the state’s oil and gas economy and to the very companies that generate revenue for PSF,” Kinsey added.
Following Mr. Kinsey’s announcement, BlackRock issued a statement declaring that the wealth management company “helps millions of Texans invest and save for retirement.” The company denied claims it was boycotting energy companies and called the decision to withdraw funding “arbitrary.”
On Friday, Fox Business reported that BlackRock Vice Chairman Mark McComb sent a letter to Mr. Kinsey saying he was “regretted” by the announcement and that Mr. Kinsey was “more interested in short-term politics than long-term fiduciary responsibility.” ” was reported to have been given priority.
“While we are in full compliance with Texas law, we fundamentally disagree with your assessment based on BlackRock’s track record with Texas PSFs and investments in Texas energy companies. Additionally, the Senate Bill No. 13 makes clear that a sale is not required if the agency determines that the sale is inconsistent with the trustee’s “responsibility,” McComb wrote. “BlackRock’s outperformance indicates that a sale may not be in Texas PSF’s best interest.”
He urged Texas to reconsider, arguing that not all PSF directors had been informed of the decision to end the relationship.
“We learned in a press release of your decision to end the 18-year relationship between Texas PSF and BlackRock. It would be irresponsible to end a partnership in such a reckless manner,” McComb continued. . “How our clients invest and who they choose to manage their money is entirely their decision, but we believe that actions of this scale require transparency and consensus, not politically driven decisions. We think Texas schools and families deserve it.”
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