After Texas announced Tuesday that it is pulling $8.5 billion from BlackRock, a giant asset management firm that boycotts traditional energy and uses its financial leverage to bully companies seeking capital into complying with the firm’s ESG ideology, BlackRock issued a blatantly hypocritical response.
In accordance with state law, the Texas Board of Education is divesting $8.5 billion of its Texas Permanent School Fund (TPSF) from BlackRock because of the asset manager’s Environmental, Social, and Governance (ESG) investment philosophy.
BlackRock bases its investment decisions on its ESG agenda, not solely on maximizing its clients’ financial returns. It boycotts oil and gas industries critical to the Texas economy, in favor of so-called “green” industries.
“BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF,” Texas State Board of Education Chairman Aaron Kinsey explained in a statement announcing the divestment.
“BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans,” Kinsey added. “The PSF will not stand idle as our financial future is attacked by Wall Street.”
The $8.3 billion divestment from BlackRock is the largest among the growing number of states withdrawing funds from the firm due to its politically-discriminatory, ESG-driven investment policies.
In response, BlackRock actually attacked Texas – by accusing the state of the very wrongdoings practiced by BlackRock that prompted the state’s divestment: putting politics over profits.
“As a fiduciary, politics should never outweigh performance, especially for taxpayers,” BlackRock told National Review in a statement.
BlackRock called Texas’ decision “arbitrary” - even though it was clearly based on BlackRock’s ESG activism:
“Today’s unilateral and arbitrary decision by Board of Education Chair Aaron Kinsey jeopardizes Texas schools and the families who have benefited from BlackRock’s consistent long-term outperformance for the Texas Permanent School Fund.”
What's more, the divestment from BlackRock was not a "unilateral" decision by Kinsey: it was required by a law passed by the state's legislature and signed by its governor.
Texas’ decision has been widely praised by those who believe asset managers should adhere to their fiduciary responsibility to their clients.
The $8.3 billion divestment sends a "clear message" that "Wall Street elites that people can no longer be bullied into complying with ESG's destructive ideology," Consumers' Research Executive Director Will Hild said, according to a report by Fox Business.
BlackRock’s practices are a “flagrant violation of fiduciary duty,” Hild said. “BlackRock was simultaneously trying to destroy the domestic oil and gas industry while managing funds that depended on royalties derived from that very same industry.”
State Financial Officers Foundation CEO Derek Kreifels applauded Texas’ move, calling it “a massive blow against the scam of ESG” and against “Wall Street’s asset managers who continue to abuse their position in the market to advance radical ideologies."
Heritage Action Executive Vice President Ryan Walker commended Texas for combating the dangerous ESG movement, calling the divestment “a win for hardworking Texans who care about their savings”:
“ESG investing fails Americans by ignoring fiduciary responsibility, economic freedom, and prosperity in the name of social justice and climate extremism.
“BlackRock’s adherence to ESG in Texas punished some of the state’s key industries and laundered Texans’ hard-earned savings into Left-wing political priorities—against their will. Texas’ $8.5 billion divestment from BlackRock is a major victory in the fight against ESG and a win for hardworking Texans who care about their savings.
“As the ESG movement infiltrates corporations and threatens Americans’ finances, it’s more important than ever for lawmakers to ensure that asset managers are following through with their fiduciary responsibilities.”