US Republican Treasurers Withdraw $1 Billion From BlackRock Funds
October 11, 2022—State treasurers from Republican-led states of Arkansas, Louisiana, South Carolina, Texas, and Utah aren’t buying into BlackRock CEO Larry Fink‘s idea of the power of capitalism to make the world a better place. In fact, they are pulling their state’s funds from BlackRock funds altogether.
The state GOP treasurers say they oppose BlackRock’s position on prioritizing environmental, social, and governance (ESG) in investment decisions.
“Corporate America is now at war with the states that make their living in the fossil fuel business,” said John Schroder, Louisiana State Treasurer, during a podcast interview with Jeff Crouere this week. “Not only is it against the law, in our opinion. My legal counsel believes they are violating the law. But more so than that, they are trying to single-handedly put the fossil fuel business out of business.”
-Real America’s Voice posted on Oct. 11, 2022
Shift From Sustainable Investment
The move shows a notable shift away from sustainable investment since the start of the year.
BlackRock’s Fink wrote eloquently about the power of stakeholder capitalism last February in his annual letter. He said businesses have an opportunity to lead and do so based on values. He talked about a “tectonic shift” towards sustainable investment.
“Every company and every industry will be transformed by the transition to a net zero world. The question is, will you lead, or will you be led?” Fink wrote.
-Annual CEO letter by BlackRock’s Larry Fink
Now, not everybody is buying into the value of net zero. And fossil-fuel states are pushing back.
GOP Pushes Back
Louisiana’s treasurer announced his decision on Oct. 5, according to reporting in S&P Global. The state withdrew $560 million from BlackRock funds and is pulling $794 million more by the end of the year. He wrote that ESG investing “is contrary to Louisiana law on fiduciary duties, which requires a sole focus on
financial returns for the beneficiaries of state funds.” Furthermore, he argued that ESG investing would harm the state’s coal and oil and gas industries.
Louisiana isn’t alone. It joined 18 other GOP-led states in the pushback against ESG. The conservative American Legislative Exchange Council is leading the charge, according to S&P Global’s Karen Rives.
According to reporting by the Financial Times, South Carolina is pulling $200 million from BlackRock, Utah is divesting $100 million, and Arkansas is withdrawing $125 million. Along with the other states, the divestments will add up to a billion loss in asset management.
Loose Definition of ESG
Another issue with ESG investing is its broad definition. Some observers say it’s too broad. For corporations, ESG spans multiple issues including climate change, social policies, and human rights, and health and safety. Other stakeholders take that definition even further. That’s a become a problem for political leaders.
For one, Louisiana’s Schroder says ESG gives companies an excuse to conduct social engineering.
“These companies have their own political beliefs. They’ve come up with this ESG jargon. But at the end of the day, it’s a way for them to push their political agendas and make it sound real. Well, it’s not real.”
-Schroder told the podcast, Real America’s Voice
Copyright secured by Digiprove © 2022 Patti Mohr