Louisiana has informed BlackRock that the state will be liquidating all investments in the corporation, blaming it for the promotion of politically driven green energy—under environmental, social and governance (ESG) standards—over fossil fuels critical to the state’s economy.
“Therefore, Louisiana Treasury will liquidate all BlackRock investments by the end of 2022. To date, we have divested $560 million. We are strategically divesting over a period of time so state money is not lost to the detriment of our citizens. Once complete, this divestment will reflect $794 million no longer entangled in BlackRock money market funds, mutual funds, or exchange-traded funds (ETFs) holdings.”
Louisiana is one of the top 10 crude oil-producing states in the country and the third highest producer of natural gas.
Pushback From States
Placing ESG’s political and social goals above “the duty to enhance investors’ returns is unacceptable under Louisiana law,” Schroder said, pointing to the letter signed by 19 state attorneys general sent to BlackRock earlier denouncing the increasingly progressive stance adopted by the investment company.“These agreements have never been ratified by the United States Senate. The Senators elected by the citizens of this country determine which international agreements have the force of law, not BlackRock.”
The Business of ESG
This year, BlackRock recorded the largest amount of money ever lost by a single firm over a six-month period when it lost $1.7 trillion of clients’ money during the first half of 2022. The corporate-behemoth manages nearly $8.49 trillion of assets, as of June 30.“Under Louisiana law, investors’ returns take precedence,” said Schroder. “I’m convinced that ESG investing is more than bad business; it’s a threat to our founding principles: democracy, economic freedom, and individual liberty.”
Schroder accused investment companies, like BlackRock, of using ESG to bypass the democratic process and push forward political agendas through compelling firms into putting “political motivations above a company’s profits and investors’ returns.”
He said, “Simply put, we cannot be party to the crippling of our own economy.”
“Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity,” said Florida Governor Ron DeSantis in a written statement.
Florida now will no longer allow fund managers to allocate pension funds’ capital of $228 billion to be invested under ESG.
In late August, Texas released a list of 10 financial companies and almost 350 funds said to be boycotting energy firms involved in fossil fuels, under Texas Senate Bill 13. The list included BlackRock, Credit Suisse, and UBS, which were slated for potential divestment due to ESG-promotion.
ESG investing is a set of standards for maintaining a company’s behavior in relation to its social and environmental commitments. According to Morgan Stanley, ESG is based on “environmental, social, and governance factors alongside financial factors in the investment decision-making process.”
However, James Lindsay, the author of “Race Marxism,” described ESG as a “weapon in the hands of ‘social justice warriors’ to shake down corporations and a tool in the hands of those seeking to impose ‘one world government.’”