The following article, Texas Ends $8.5 Billion Investment In BlackRock, was first published on Big League Politics.
The Texas state government recently ended a large $8.5 billion investment in asset management giant BlackRock. The state government made this move over the asset management’s engagement in a boycott of energy companies.
State Board of Education Chairman Aaron Kinsey announced that Texas “will not stand idle as our financial future is attacked by Wall Street.”
He also told FOX Business that the Texas Permanent School Fund (PSF) had sent a notice to BlackRock on March 19, 2024 informing the New York City-based firm of the move. Per Kinsey, the action was taken in compliance with a 2021 state law that aims to decouple the state and its large war chest from financial institutions engaging in boycotts of the oil and gas sector.
“The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office,” Kinsey remarked in a statement on March 19. “Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.”
“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 and the PSF have worked hard to grow this fund to build Texas’ schools,” he added. “BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.”
On top of that, this move is the largest divestment of its type since red states started breaking their financial connections to BlackRock and other financial players over their embrace of environmental, social and governance (ESG) standards.
The ESG movement pushes for investments to be withdrawn from traditional energy industries and put those funds in green energy industries that are allegedly fighting against global warming.
However, the ESG movement has faced significant resistance from both the energy industry and lawmakers at the state and federal level.
Republican-controlled state governments have resisted ESG initiatives.
The Texas state government, for example, passed Senate Bill 13 in 2021, mandating its state comptroller to put out a list of financial companies caught boycotting fossil fuel companies.
Back in October, Texas Comptroller Glenn Hegar most recently updated that list, which includes BlackRock and several funds managed by the company. He subsequently urged the Texas Permanent School Fund, on top of five other state pension funds, to break ties with the asset manager.
“Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street,” Kinsey commented on March 19. “This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.”
At this point in US political history, red states have to assert themselves in nefarious private actors that promote malign values. Gone are the days of playing by the rules and blindly abiding by suicidal principles such as blind devotion to the free market.
The time to fight is now.
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