North Carolina Treasurer Wants BlackRock CEO Larry Fink to ‘Resign or Be Removed’

North Carolina Treasurer Wants BlackRock CEO Larry Fink to ‘Resign or Be Removed’
BlackRock CEO Larry Fink attends a session at the World Economic Forum annual meeting in Davos on Jan. 23, 2020. Fabrice Coffrini/AFP via Getty Images
Nathan Worcester
Updated:
0:00

You might call it the “battle of BlackRock.”

The conflict, which pits Republican officials in states across the country against the world’s largest asset manager, has only intensified in recent months.

Just days ago, Florida became the latest state to pull money from BlackRock—in its case, $2 billion in state-controlled assets.

The state’s chief financial officer, Jimmy Patronis, explained that “using Florida’s cash to fund BlackRock’s social-engineering project isn’t something we signed up for.”

Now, North Carolina Treasurer Dale Folwell has taken the rhetoric up another notch.

In a Dec. 9 letter to BlackRock’s board of directors, he called for the firm’s CEO, Larry Fink, to “resign or be removed” from his position.

BlackRock CEO Larry Fink during the 79th Annual Convention of Bankers in Acapulco, Mexico, on March 11, 2016. (Pedro Pardo/AFP/Getty Images)
BlackRock CEO Larry Fink during the 79th Annual Convention of Bankers in Acapulco, Mexico, on March 11, 2016. Pedro Pardo/AFP/Getty Images

Folwell argued that BlackRock’s focus on “environmental, social and corporate governance” (ESG) under Fink’s leadership runs contrary to its fiduciary duty—in other words, its legal obligation to serve its clients’ best interests.

Those many clients include the North Carolina Retirement System, for which Folwell serves as sole fiduciary. Of the $111.4 billion fund, $14 billion is presently managed by BlackRock, according to the letter.

ESG is an investment philosophy that aims to embed particular values—for example, concern about climate change—into the financial system. Its conservative critics argue that it distorts the economy by privileging politically correct sentiment over the hard realities of the market.

Folwell warned that Fink’s “pursuit of a political agenda has gotten in the way of BlackRock’s same fiduciary duty.”

“A focus on ESG is not a focus on returns and potentially could force us to violate our own fiduciary duty,” he added—a broad hint, perhaps, at a potential future willingness to divest from the asset manager.

Florida’s divestment from BlackRock isn’t the only such move in the last several months.

Under Missouri’s Republican Attorney General Eric Schmitt, now the Show Me State’s senator-elect, millions in Missourians’ retirement dollars were taken out of BlackRock’s hands.

State Attorney General Eric Schmitt and family members attend an election-night gathering after winning the Republican primary for U.S. Senate at the Sheraton in Westport Plaza in St Louis, Mo., on Aug. 2, 2022. (Kyle Rivas/Getty Images)
State Attorney General Eric Schmitt and family members attend an election-night gathering after winning the Republican primary for U.S. Senate at the Sheraton in Westport Plaza in St Louis, Mo., on Aug. 2, 2022. Kyle Rivas/Getty Images

Louisiana, Utah, and Arkansas have followed similar courses of action.

The biggest concern from many of those states has been BlackRock’s efforts to steer investors away from fossil fuels, out of a stated concern with climate change driven by human activity.

In his 2020 Letter to Shareholders, Fink wrote that “in the near future—and sooner than most anticipate—there will be a significant reallocation of capital.

Fink went on to tout BlackRock’s “initiatives to place sustainability at the center of our investment approach.”

A subsequent list of those initiatives included “exiting investments that present a high sustainability-related risk, such as thermal coal producers” and “launching new investment products that screen fossil fuels.”

Treasurers, attorneys general, and other officials from fossil fuel-producing states have argued that BlackRock’s ESG-related commitments undermine the prosperity and stability of their own communities.

BlackRock, for its part, has responded to the ongoing pressure campaign from state-level officials with a website, “Energy investing: Setting the record straight.”

There it argues that it identifies climate change as a long-term risk it needs to protect its clients’ interests from.

“Our consideration of the risks and opportunities of a transition to a low-carbon economy is in the interest of realizing the best long-term financial results for our clients and entirely consistent with our fiduciary duty,” that website states.

Many environmental groups argue that the big banks and asset managers targeted by Republican officials are not doing enough to promote fossil fuel divestment. They’re among the biggest supporters of ESG-like policies to transform the private sector under President Joe Biden, such as the Securities and Exchange Commission’s (SEC) proposal to mandate climate-related disclosures from publicly traded companies.

A drilling crew member raises drill pipe onto the drilling rig floor on an oil rig in the Permian Basin near Wink, Texas, on Aug. 22, 2018. (Nick Oxford/Reuters)
A drilling crew member raises drill pipe onto the drilling rig floor on an oil rig in the Permian Basin near Wink, Texas, on Aug. 22, 2018. Nick Oxford/Reuters
A Dec. 8 article from the Sierra Club, for example, praised BlackRock for “starting to push back” against Republican officials’ campaign against ESG.

Yet they noted that BlackRock continues to manage fossil fuel investments on behalf of its clients.

The Epoch Times has reached out to BlackRock for further comment.

Nathan Worcester
Nathan Worcester
Author
Nathan Worcester covers national politics for The Epoch Times and has also focused on energy and the environment. Nathan has written about everything from fusion energy and ESG to national and international politics. He lives and works in Chicago. Nathan can be reached at [email protected].
twitter
truth
Related Topics