The world’s largest asset manager is pushing back against efforts by Republican-controlled states to force it to reconsider its environmental, social and governance (ESG) investing strategy, The New York Times reported.
In response to an Aug. 4 letter from 19 Republican state attorneys general, BlackRock Senior Managing Director Dalia Blass aimed to correct “misconceptions” and “inaccurate statements” about its climate position.
In her response, Blass maintained that BlackRock's participation in ESG initiatives "is entirely consistent with our fiduciary obligations" to clients, according to Yahoo! Finance. She also wrote that climate change poses real risks and opportunities for investors, a view that is “by no means unique.”
“[W]e do not coordinate our votes or investment decisions with external groups or organizations," Blass wrote to counter the AGs' assertion that the company puts a “climate agenda" ahead of its clients, that it has allied itself with climate change advocacy organizations and and that it boycotts energy companies. Indeed, Blass pointed out, BlackRock invests hundreds of billions of dollars in energy companies.
The letter from BlackRock was not made publicly available, but it was obtained by many news organizations.
Last month, The Wall Street Journal reported that Florida banned state pension fund managers from incorporating ESG factors into investments. In July, the Journal reported that West Virginia ceased awarding business to BlackRock, JPMorgan Chase & Co. and others, saying that ESG hurts its economy. In addition, Texas Comptroller Glenn Hegar barred BlackRock, BNP Paribas SA, Credit Suisse Group AG and others from doing business in his state, accusing them of boycotting energy companies, according to the Financial Times.
Despite the objections of these states, ESG has proven to be popular. The New York Times reported an average of 80 percent support for shareholders’ proposals that encourage companies to consider ESG issues in their public pension fund investments. That number comes from a study conducted by research firm Morningstar.