OAN’s Avril Elfie
3:30pm – Wednesday, March 20, 2024
The Texas State Board of Education announced it would withdraw billions of dollars from its investment in BlackRock Inc., which has been accused of boycotting fossil fuels.
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In a statement released Tuesday, Texas State Board of Education Chairman Aaron Kinsey called BlackRock’s “dominant and tenacious leadership in the ESG movement” into closing an $8.5 billion investment in the giant investment firm. This was cited as a reason to justify the committee’s decision.
Located at the center of a vocal anti-ESG movement led by Republican politicians in the United States, BlackRock is the world’s largest investment manager and a leading voice in the investment community on investment topics related to climate change and the energy transition. ing.
Politicians accused BlackRock of following a social agenda and working to harm the energy company.
Texas has been at the forefront of anti-ESG efforts. The Lone Star State recently banned British bank Barclays from the municipal bond market over its ESG policies, compiled a list of asset managers that could be sold for allegedly supporting energy companies, and arrested State Street and BlackRock executives. A public hearing was held to question the matter. About investment practices, engagement voting, ESG and climate-related controls.
As states increasingly speak out against ESG, investors can pay a high price for these actions.
Many states have proposed legislation to outlaw ESG investing, but many have faced opposition due to the costs and revenue reductions these anti-ESG efforts are expected to bring.
For example, the Texas County and District Retirement System (TCDRS) analyzed last year’s proposed law that would ban ESG investing in state public retirement investment plans, which would require retirement plans to partner with top companies. It was estimated that this could be hindered. Over a 10-year period, it lost more than $6 billion in revenue.
Sen. Brian Hughes (R-Texas), who introduced the anti-ESG bill in 2023 and led the aforementioned hearing, expressed his opinion in a social media post after the Education Committee’s announcement.
“BlackRock and Wall Street companies have been using Texans’ money to advance left-wing agendas. Texas continues to fight back. That’s why we are extracting $8.5 billion from BlackRock and moving Texans forward with their leftist agenda. We’re making it clear to Wall Street companies that they can’t use taxpayer money to hurt jobs and attack energy dominance.”
According to Kinsey’s statement, the decision to discontinue investing in BlackRock follows the Texas Permanent School Fund (PSF)’s “Boycott of Investments in Certain Financial Companies” policy introduced in 2021. This was done to ensure compliance with Senate Bill 13, which prohibits energy company. ”
“BlackRock’s dominant and persistent leadership in the ESG movement is causing untold harm to the state’s oil and gas economy and to the very companies that generate revenue for PSF,” he said.
BlackRock CEO Larry Fink emphasized the company’s close ties to the energy industry in a recent statement, saying that during the Republican presidential debates BlackRock promoted ideological policies and that energy companies He refuted claims that it was hindering production.
Fink said his company’s customers have invested more than $170 billion in U.S. energy companies.
Despite political pressure, BlackRock earlier this year highlighted sustainability-related issues such as “climate and natural capital” and “the impact of business on people” in its 2024 commitment priorities. He indicated that he would continue to work with companies.
Additionally, the company made clear that its strategy to address climate-related risks and opportunities is to understand how these factors are likely to impact the company’s long-term business plans and strategies. “It is not our role to design concrete decarbonization outcomes in real society,” he said. economy. “
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