Missouri announced Tuesday it is pulling some $500 million in pension funds from BlackRock, joining other Republican-led states divesting from the firm over its commitment to environmental and social goals in investing.
Missouri State Treasurer Scott Fitzpatrick announced that the Missouri State Employees’ Retirement System has pulled all public equities from BlackRock, which is the world’s largest money manager.
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BLACKROCK HITS BACK AT REPUBLICAN ATTORNEYS GENERAL CRITICAL OF ITS ESG POLICIES
Fund managers such as BlackRock proxy vote at corporate shareholder meetings on behalf of investors. The MOSERS board of trustees had asked BlackRock to stop proxy voting on its behalf, but BlackRock refused to do so, according to Fitzpatrick. The demand was driven out of concern for the firm’s prioritization of environmental, social, and governance standards and public statements.
“Fiduciary duty must remain the top priority for investment managers — a duty some of them have abdicated in favor of forcing a left-wing social and political agenda that has failed to succeed legislatively on publicly traded companies,” Fitzpatrick said. “MOSERS has an obligation to manage its assets in a way that prioritizes providing maximum possible returns for retirees and taxpayers.”
Fitzpatrick accused BlackRock of prioritizing a “woke political agenda” over delivering shareholder value. He asserted the action was taken to prevent Missourians’ tax dollars from “being weaponized against them.”
The Missouri divestment represents another case of Republican officials targeting BlackRock in recent months as attacks against ESG and stakeholder capitalism grow in the lead-up to the midterm elections. ESG, and BlackRock specifically, has become a political punching bag for Republican statewide officials such as treasurers and attorneys general.
Earlier this month, South Carolina State Treasurer Curtis Loftis’s office confirmed it will be divesting all its BlackRock holdings. His office told the Washington Examiner that Loftis has been removing BlackRock-managed funds over the past five years and will be divesting the final $200 million in BlackRock holdings by the end of the year.
Louisiana State Treasurer John Schroder also told BlackRock CEO Larry Fink that the state is divesting all its treasury funds from the investment firm because of its pursuit of ESG and over accusations that it intends to move away from the fossil fuel industry, allegations BlackRock denies.
Schroder announced that the state has divested $560 million, which will increase to $794 million over the coming months as Louisiana exits BlackRock money market funds, mutual funds, and exchange-traded fund holdings.
Additionally, Utah State Treasurer Marlo Oaks said he has yanked about $100 million in state funds from BlackRock, and Arkansas State Treasurer Dennis Milligan divested some $125 million out of money market accounts managed by the firm,
In total, the combined actions equate to more than $1.5 billion in divested funds by year’s end — a significant blow to the firm.
Following the Missouri news on Tuesday, a spokesperson for BlackRock told the Washington Examiner that the company is built on providing clients choice to “reflect their unique goals and preferences.”
“While the actions of some elected officials have attracted media headlines, they do not reflect the totality of our clients’ investment decisions,” the spokesperson said. “For example, clients have awarded BlackRock $248 billion of net new long-term assets this year, including $84 billion in the third quarter in the United States alone. We remain committed to offering our clients choice and delivering them the best financial outcomes consistent with their preferences.”
CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Amid the barrage of divestments, BlackRock launched a webpage committed to “setting the record straight” about how it handles investment decisions, disclosure, and ESG. The firm claims its views on climate risk aren’t unique, and its new webpage noted that an overwhelming majority of companies in the S&P 500 publish sustainability reports.
“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 webpage reads. “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.”
