States withdraw money: US conservatives see BlackRock ‘wake up’ too

Countries withdraw money
American conservatives think Blackrock “wake up” a lot

By Jan Ginger
10/19/2022 at 5:15 pm

Blackrock, the world’s largest asset manager, stresses that when investing, he also considers environmental and social standards and good corporate governance. American Republicans think this is a bad idea.

For some, Blackrock is the epitome of profit-oriented financial capitalism. But for others, the world’s largest asset manager “wake up” a lot. This accusation comes from conservative politicians in the United States. To their taste, Blackrock places too much emphasis on good environmental, social and corporate governance (ESG) standards when investing, thus forgoing returns.

Blame it on the so-called “wake up” culture, which at its core is about fighting discrimination and exclusion and for sustainability, is part of the repertoire of US conservatives.

Scott Fitzpatrick, Missouri’s Treasury Secretary, spoke of a “conscious political agenda” and announced that all managed money from the state pension fund would be withdrawn from BlackRock. It’s about $500 million. Several Republican-ruled states have threatened to cut ties with BlackRock over concerns about environmental, social and corporate governance.

Earlier this month, Louisiana Treasury Secretary John Schroeder announced plans to withdraw nearly $800 million. Reason: Focusing on ESG standards is inconsistent with the economic interests and values ​​of the country. “Your anti-fossil fuel agenda will destroy Louisiana’s economy,” Schroeder wrote to Blackrock CEO Larry Fink.

So far, the damage to Blackrock is manageable. The group currently manages nearly $8 trillion. According to its own data, the asset manager recorded a net cash flow of $248 billion this year. BlackRock emphasized investing in fossil fuels, too. About $100 billion has been invested in Texas energy companies.

Meanwhile, environmental groups accuse BlackRock of not doing enough to convert the energy. Fink said last week that he is now being attacked on an equal footing from the left and right: “So I’m doing something right.”