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BlackRock Duel with Republicans over Climate

Business

BlackRock Signage | Image by Shutterstock

Texas state senators and financial executives from BlackRock and State Street Corp had a head-to-head confrontation on climate change concerns at a hearing on Thursday.

Texas Republicans at the hearing questioned the participation of BlackRock and State Street in industry efforts to cut emissions, saying those efforts put too much pressure on portfolio companies, according to Reuters.

Bryan Hughes, chair of the Texas Senate Committee on State Affairs, expressed skepticism that managers could set aside the collective goals of groups like the Net Zero Asset Managers initiative, which Vanguard Group Inc. quit last week, according to Reuters.

Vanguard Group dropped out of the program last week to avoid testifying at the hearing, according to the Observer. The company cited a need for independence.

The Net Zero Asset Managers Initiative is a program among financial powerhouses pledging to support the goal of net zero greenhouse gas emissions by 2050 or sooner.

Hughes asked BlackRock about the assets it pledged for the program, “You didn’t mean that? You had your fingers crossed?”

BlackRock Senior Managing Director Dalia Blass said her firm maintained its independence.

“We have one bias, and that’s to get the best risk-adjusted returns for our clients,” Blass said.

State Street’s global chief investment officer took a similar line: “We are obligated to act as a fiduciary for our clients, and that duty is the basis for our approach to ESG.”

BlackRock has been singled out by Texas for alleged over-pressuring of its energy sector, according to Reuters.  The company has been penalized under a new state law to protect fossil fuel companies.

Republicans leading this campaign say they’re concerned that prioritizing ESG endangers the energy industry and is a disservice to shareholders. Critics say the backlash is a political move to protect oil and gas companies, according to the Observer.

Hughes said at the hearing that Texans deserve to know how the ESG will affect their pension funds.

Texas energy businessman Bud Brigham said a Credit Suisse banker suggested he tweet in support of net zero goals to help get a loan. Brigham called the request coercion. “I was very offended by that,” he said.

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Jpchiesa
Jpchiesa
1 month ago

Texas Republicans should follow suit like Florida and pull their assets out of Blackrock as well. You don’t think ESG’s are a problem for Texas? How about the freeze 2 years ago and the electrical grid failure because esg wind turbines froze. With the oil and natural gas deposits we have? Shameful!

David
David
1 month ago

As many, I hope, are aware, ESG has little to do with the environment and everything to do with corporate partnership with the government for control. Look at history. This type of thing has happened over and over. Even Buffet’s partner says he doesn’t want to bow to a dictator as the big 3 funds gobble up utility stocks. The environment is a tool as COVID. Wake up America!

Mike Allen
Mike Allen
1 month ago

This is all about control for profit. As well as energy, they are going after food. “You will own nothing and be happy”!!!

John White
John White
1 month ago

Larry Fink, CEO of BlackRock, has employed his ESG evaluation system to “force behaviors”. I refer you to a 2017 video titled “DealBook 2017: The Economy, Consumers and Redefining the Long Term”. Beginning at minute 27:46, Larry Fink says, “…behaviors are gonna have to change, and this is one thing we’re gonna we’re asking companies you have to force behaviors, and at Blackrock, we are forcing behaviors”

ESG is about forcing behaviors on the people of our country but not on communist China, where Fink heavily invests American dollars.

https://youtu.be/-cCs9Kh2Q08

Last edited 1 month ago by John White