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Nearly two years after a Republican campaign to punish BlackRock for arguing that climate change poses financial risks, the red state investment fund has pulled about $13.3 billion from the world's largest asset manager.
That figure is about one-tenth of 1 percent of BlackRock's $10 trillion in assets under management, and some Republican state pension funds still leave well over $20 billion with the asset manager. . Overall, BlackRock reported net inflows of $138 billion in the Americas last year.
The $13.3 billion withdrawal also includes last week's announcement that the Texas Permanent School Fund would withdraw $8.5 billion at the end of April, the largest withdrawal ever for a Republican-run pension fund.
BlackRock seeks to respond to campaigns against environmental, social and governance factors in a variety of ways. In Washington, he added a senior lobbyist with ties to the Republican Party.Last month, the company co-sponsored Power grid investment summit in Houston with Texas Lieutenant Governor Dan Patrick. Patrick had previously expressed “serious concerns” about the group's use of ESG factors in its investments.
The conservative attacks on climate change coincide with renewed vigilance by BlackRock and other asset managers about joining industry coalitions aimed at tackling climate change. BlackRock scaled back its commitment to Climate Action 100+, and State Street, JPMorgan Asset Management, Pimco and Invesco withdrew completely.
But after the Texas fund's announcement, BlackRock hit back hard.
“It would be irresponsible to end in such a reckless manner a long and successful partnership that has been a positive force for thousands of Texas schools and families,” said Mark McComb, BuckRock's chief customer officer. '' in a letter to Texas State Board of Education Chairman Aaron Kinsey. In a letter asking for reconsideration of the decision.
BlackRock declined to comment on the size of Red State's ESG-related divestments.
The leak began in 2022 when West Virginia Treasurer Riley Moore added BlackRock to the nation's first list of financial companies deemed to boycott fossil fuel companies. Texas, Florida, Missouri and other Republican-led states have followed suit with anti-ESG initiatives and divestments.
During this period, investors pumped more than $355 billion in net new capital into BlackRock's products.
The divestment movement began in Kentucky. There, pension officials said draining billions of dollars from BlackRock and other companies that use ESG factors violates its fiduciary duty to maximize profits.
In North Carolina, state Republican treasurer Dale Falwell publicly criticized BlackRock, while leaving $18.4 billion with the fund manager. Mr. Falwell has negotiated lower fees and is now voting his state holdings by proxy rather than having BlackRock do the voting, he said. Mr. Falwell called for the removal of BlackRock's chief executive, Larry Fink, but said he could not find a cheaper asset manager.
“There's only one fingerprint on this whole strategy, and you know how unique fingerprints are, and that fingerprint is his,” Falwell said.
In Texas, local businesses have expressed concerns about the state's “fair access” law, which requires state and local governments to divest from financial companies deemed hostile to fossil fuels and firearms.
A study released last month by the Texas Chamber of Commerce and related nonprofits found the law could undermine the state's efforts to promote a pro-business environment and cost the state $37.1 million in lost tax revenue. found.
“Simply put, when governments try to force values (of any kind) on businesses, markets lose money, and taxpayers end up paying the consequences,” the study said. ing.
