North Carolina state treasurer Dale Folwell is calling for the CEO of the asset management firm BlackRock, Larry Fink, to step down over the company’s promotion of Environmental, Social, and Governance principles.
Folwell joins a growing group of Republicans taking aim at BlackRock over what they describe as activism in favor of environmentalist and liberal social policies at the expense of financial results. The call for change in company leadership came in a letter from Folwell to BlackRock’s board of directors, saying that his “political agenda has gotten in the way of his same fiduciary duty.”
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BLACKROCK EXPANDS DEFENSE AGAINST REPUBLICAN ESG PUSHBACK
“BlackRock and Mr. Fink have been using the financial power of their clients to force the global warming agenda by using their proxy voting authority to push companies to “net zero,” often in conflict with their fiduciary responsibilities,” Folwell said in the letter.
Folwell notes that the state’s retirement system has “approximately $14 billion invested through BlackRock in various active but mostly passive funds at the lowest possible investment fees, in addition to around $55 million passively invested in BlackRock stocks or bonds.” He did not, though, say the state would divest from BlackRock, as other GOP-led states have in recent weeks and months.
The state treasurer continued by listing examples of how, allegedly under Fink’s leadership, BlackRock has focused on ESG standards rather than making their investors the most money possible. He also welcomed the change to allow proxy voting for smaller investors but says it “does not mitigate the need for a new direction at BlackRock.”
Folwell is the latest elected official to criticize BlackRock and its direction under Fink. The company has pushed back against criticisms, which have mainly been leveled by Republican leaders, by creating a new website to “set the record straight.”
“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,” the website says. “We are also partnering with energy companies and start-ups to fund new technology and innovations that will power the global economy, now and in the future.”
The company also defends its investments by saying accounting for climate change will serve investors better in the long-term future.
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Several states, including Florida and Louisiana, have divested from BlackRock, citing the focus on ESG rather than making money for its clients.
The nearly $2 billion Florida divested is the largest by any state so far, with the Sunshine State saying they do not trust the company’s judgment as the economy faces the risk of recession.
