The Chief Financial Officer of Florida he said his department will withdraw 2 billion dollars of assets managed by BlackRock before the end of the year. This is the largest divestment of its kind by a state opposing the environmental, social and corporate governance (ESG) policies of the world‘s largest asset manager. This was revealed by a study released by Reuters.
The move does not affect the manager
While the move doesn’t dent BlackRock’s $8 trillion in assets, the firm points out that the attack by many Republican politicians, such as those in Florida, on ESG investing – which they believe promotes a “woke agenda” – is gaining momentum and puts political ideology before investor interests.
Republicans will take control of the House of Representatives in January. This will allow them to hold ESG hearings and question the CEOs of BlackRock and other major asset managers about their ESG policies, as well as lobby regulators to scrutinize them.
Anti-ESG criticism
In a statement, Florida Chief Financial Officer Jimmy Patronis said the state Treasury, which he oversees, would remove BlackRock as manager of about $600 million in short-term investments and ask its custodian to freeze $1.43 billion in dollars of long-term securities now with BlackRock, with a goal of reallocating the money to other managers by early 2023.
Between ethics and returns
Patronus ha accused BlackRock to focus on ESG rather than higher returns for investors. While the asset manager has encouraged portfolio companies to take steps such as disclosing more data on carbon dioxide emissions or adding more diverse board members, he said his efforts are aimed at improving performance. of companies and has resisted calls for measures such as divestment from oil companies. US Democratic officials have argued that BlackRock does not press hard enough on ESG issues.
BlackRocka prominent voice in the investment community on themes of climate change and the energy transition, has found itself at the center of many of these efforts, with the Louisiana which recently announced a nearly $800 million divestment plan from BlackRock funds to “protect” State Treasury funds “from ESG” and the Missouri which withdrew $500 million of pension assets from BlackRock due to the company’s “vague political agenda.”