On August 4, Texas Attorney General Ken Paxton and 18 other attorneys general issued a scathing letter to BlackRock CEO Larry Fink, warning that they “will not idly stand for our pensioners’
retirements to be sacrificed for BlackRock’s climate agenda.”
According to the letter, “Based on the facts currently available to us, BlackRock appears to use the hard-earned money of our states’ citizens to circumvent the best possible return on investment, as well as their vote. BlackRock’s past public commitments indicate that it has used citizens’ assets to pressure companies to comply with international agreements such as the Paris Agreement that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States.”
Paxton and his colleagues identify six specific ways that BlackRock, which holds $10 trillion in its asset portfolio, is intentionally bypassing its fiduciary responsibility to maximize shareholder profits in favor of pursuing its climate and social justice agenda via its environmental, social, and governance (ESG) investing standards.
Paxton writes, “As a firm, BlackRock has committed to implementing an ESG engagement and voting strategy across all assets under management, and held over 2,300 company engagements on climate, the most of any category of engagement. BlackRock took voting action against 53 companies on climate issues, with 191 companies put on watch. A governance engagement strategy primarily focused on BlackRock’s climate agenda necessarily overlays ESG factors on the core index portfolios that comprise a substantial part of many state pension funds. BlackRock’s engagement strategy, in which a net zero climate agenda is a significant or main consideration, would covertly convert states’ core index portfolios to ESG-Focused funds should the SEC’s recently proposed definition of an ESG fund be adopted.”
In other words, Paxton is telling BlackRock it cannot put its pet causes over and above the financial interests of the millions of Americans who are invested in state pension funds. Historically, before the advent of ESG investing metrics, giant investment firms like BlackRock have been solely interested in maximizing investment returns for shareholders. However, based on the ESG investment model, BlackRock and others are now placing more emphasis on nebulous goals that often conflict with their fiduciary duty of maximizing shareholder value.
Fortunately, brave attorneys general like Paxton are refusing to roll over while BlackRock and other investment firms attempt to enforce ESG investing standards at the peril of hardworking Americans who have entrusted that their retirement funds are in good hands.
Make no mistake, ESG investing is a crony capitalist scam that allows power-hungry financial titans like Larry Fink, central planners, globalists, and so-called experts to pick and choose winners and losers. ESG standards are purely subjective, and can change at any moment based on the whims of those who make the new rules. This is not free-market capitalism. It is big government socialism.
Paxton closes his letter with this warning for Fink: “The time has come for BlackRock to come clean on whether it actually values our states’ most valuable stakeholders, our current and future retirees, or risk losses even more significant than those caused by BlackRock’s quixotic climate agenda.”
It would certainly behoove BlackRock and others to heed to the concerns expressed by Paxton and the 18 other attorneys general who are expressing their dismay with the ESG agenda. However, it appears doubtful that BlackRock will do so willingly. Perhaps, as Paxton alluded to, it is time to throw down the gauntlet on BlackRock and all others promoting the ESG swindle.
Chris Talgo ([email protected]) is the editorial director and a research fellow at The Heartland Institute, as well as a researcher and contributing editor at StoppingSocialism.com.
