As the world’s largest money manager — with an outspoken CEO who has called for companies to think about more than just profits — BlackRock has been a political target among Republicans. At the same time, the firm has emphasised that it continues to manage fossil fuel investments and doesn’t advocate for such divestment.
A spokesperson at BlackRock wasn’t immediately available for a comment.
Former Vice President Mike Pence said this year that large investment firms are pushing a “radical ESG agenda,” mentioning BlackRock specifically. In all, 19 attorneys general from states largely with GOP-dominated governments, including Arizona, Kentucky and West Virginia, have lashed out at BlackRock for pursuing a “climate agenda,” at odds, they allege, with generating returns for state pensions. Louisiana and Missouri are among states that have also pulled money from the asset manager.
BlackRock, Vanguard, State Street Corp. and Institutional Shareholder Services Inc. will send executives to East Texas this week to appear before state senate committee on policies related to ESG practices.
The attendees will be Dalia Blass, BlackRock’s head of external affairs; Lori Heinel, State Street’s global chief investment officer; John Galloway, Vanguard’s global head of investment stewardship and Lorraine Kelly, ISS’s global head of investment stewardship.
The growing popularity of ESG investing has led to significant underinvestment in the “dirty” economy.Credit:AP
The hearing will look into the investment practices of finance firms and how those policies may impact the state’s public pensions, according to the notice for the hearing. Texas governor Greg Abbott’s administration has been at the forefront of efforts to discourage the spread of ESG investing, which GOP lawmakers are worried could choke off capital for the state’s fossil-fuel industry.
North Carolina Treasurer Dale Folwell has called for Fink to resign because of the CEO’s focus on ESG, according to Pensions & Investments.
On the flip side of that argument, Bluebell Capital Partners, a small activist investor, called on Tuesday to replace Fink, claiming that despite his high-profile role in advocating for ESG investing, he’s undermining BlackRock’s credibility by continuing to invest in fossil fuels including coal.
Market turbulence and a dim economic outlook have helped amplify anti-ESG voices, DeFeo said.
“In an environment where everyone’s portfolio was knocking it out of the park — those voices might get drowned out.”
With assistance from Saijel Kishan and Amanda Cantrell.
Bloomberg L.P.
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