A string of Republican states have announced they are pulling out their investments in the world’s largest asset manager, BlackRock, due to concerns over the company’s move to embrace environmental, social, and governance (ESG) investment strategies.
“Once complete, this divestment will reflect $794 million no longer entangled in BlackRock money market funds, mutual funds, or exchange-traded funds (ETFs) holdings.”
Republicans Issue Demands
Utah’s treasurer, Marlo Oaks, announced in September that he has liquidated $100 million in BlackRock funds and moved those funds to different asset managers, while Arkansas’s state treasurer, Dennis Milligan, reportedly pulled $125 million in March.New York-based BlackRock, which manages $10 trillion in assets, is one of the most powerful entities in the world.
The company also owns large stakes in a substantial number of companies in the United States and worldwide, including Apple, Microsoft, and Amazon, and, given its huge stakes, consequently holds great influence in determining the policies of those companies.
However, the asset manager has increasingly come under fire from Republican lawmakers who have accused it of placing its political agenda above the interests and profits of clients.
“BlackRock’s past public commitments indicate that it has used citizens’ assets to pressure companies to comply with international agreements, such as the Paris Agreement, that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States,” the attorneys general wrote in their letter.
BlackRock Issues Rebuttal
Last week, the investment company published a new page on its official website titled, “Energy Investing: Setting the Record Straight,” in which it states that “the energy industry plays a crucial role in the economy, and, on behalf of our clients, BlackRock has invested $170 billion in U.S. public energy companies,” including pipelines and power-generation facilities.“Despite these investments, BlackRock has recently been accused of ‘boycotting’ oil and gas companies. We’re setting the record straight about our focus on energy investing, our responsibilities to clients, and how we consider climate risk,” the page reads.
The company noted that its priority is “fulfilling our commitment to our clients’ financial interests” and that it does not “dictate how clients should invest,” but that it believes that “companies that better manage their exposure to climate risk and capitalize on opportunities will generate better long-term financial outcomes.”
“We have not made commitments or pledges to meet environmental standards that constrain our ability to invest our clients’ money on their behalf consistent with their objectives,” the company added.
