South Carolina will be divesting all of its BlackRock holdings by the end of the year, the latest instance of backlash from Republican state officials over the investment firm’s stance on fossil fuels.
State Treasurer Curtis Loftis’s office confirmed the plan to the Washington Examiner on Monday. His office said Loftis has already been removing BlackRock-managed funds over the past five years and is in the process of divesting the final $200 million of BlackRock holdings by year’s end.
LOUISIANA ANNOUNCES NEARLY $800 MILLION DIVESTMENT FROM BLACKROCK OVER ESG PUSH
“I will not allow our financial partners to undermine my fiduciary responsibility to maximize investment returns while accepting a prudent level of risk for the benefit of our citizens. It is imperative that we stand up to BlackRock and resist the pressure to simply fall into line with their leftist worldview,” Loftis said.
The news comes just days after Louisiana’s state treasurer told BlackRock CEO Larry Fink that the state is divesting all of its treasury funds from the investment firm because of its pursuit of environmental, social, and governance standards, also known as ESG, and accusations that it intends to move away from the fossil fuel industry, allegations it denied.
Louisiana State Treasurer John 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.
“Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy,” Schroder said in a letter to Fink. “This divestment is necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector. In my opinion, your support of ESG investing is inconsistent with the best economic interests and values of Louisiana.”
In addition to South Carolina and Louisiana, 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, which is the largest money manager in the world.
In total, the actions by the state treasurers will equate to more than $1 billion in divested funds by year’s end.
BlackRock has responded to the divestments and other threats from GOP state treasurers and attorneys general with a public awareness campaign pushing back on characterizations that it is “boycotting” the energy industry and has gone “woke” in its investment strategies.
On Friday, BlackRock launched a webpage committed to “setting the record straight” about how it handles investment decisions and disclosure and its pursuit of ESG. BlackRock 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 read. “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.”
In August, 19 GOP attorneys general also sent a letter to Fink challenging his firm’s commitment to ESG priorities. They claimed BlackRock’s policies are undercutting shareholder profits in managing state pension funds.
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In response, Dalia Blass, BlackRock’s head of external affairs, said in a letter to the group of attorneys general that climate change is becoming a major risk and that investors and clients want to be apprised of the risks in order to achieve better returns.
“Governments representing over 90% of global GDP have committed to move to net-zero in the coming decades,” Blass said. “We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes. These opportunities cut across the political spectrum.”
