Texas Officials Cut Ties With BlackRock

Texas administrators are cutting ties with BlackRock Inc, citing concerns about the financial asset management company’s support of environmental, social, and governance (ESG) policies and reported funding of anti-fossil fuel initiatives.

Reuters reported that conservatives accuse the investment giant of encouraging groups to boycott Texas fuel energy producers, representing a significant industry sector in the state.

On Tuesday, Texas Permanent School Fund (PSF) administrators terminated their $8.5 billion investment partnership with the world’s largest investment company.

Headquartered in New York City, BlackRock has 78 offices in 38 countries and manages trillions in assets.

Texas State Board of Education Chairman Aaron Kinsey explained that the decision to decouple from BlackRock stems from a 2021 law that “prohibits state investment in companies like BlackRock that boycott energy companies.”

Kinsey clarified that according to law, BlackRock’s EGS policies made it an ineligible financial partner for PSF.

Fox News’ Maria Bartiromo reported that PSF referred to BlackRock’s policies as “destructive, adding that a PSF spokesperson said, “BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil and gas economy and the very companies that generate revenues for our PSF.”

According to a report in The Hill, Texas oil and gas industry revenue yielded more than $26 billion in state and local taxes in 2023. Approximately $1.8 billion of that revenue supported the PSF fund.

Other GOP-led state agencies and conservative groups have divested from BlackRock in recent years amid complaints that the firm pushes ESG policies and actively drives a “woke” agenda.

The Daily Wire reported that BlackRock has reined in some ESG proposals, but many assess the moves are too little too late.

PSF administrators argue they have “a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office.”

Kinsey added that decoupling from BlackRock “ensures PSF’s full compliance with Texas law.”

BlackRock has pushed back, posting that they are “helping millions of Texans invest and save for retirement.”

Their post added: “On behalf of our clients, we’ve invested more than $300 billion in Texas-based companies, infrastructure and municipalities, including $125 billion invested in the energy sector, including a $550 million joint venture with Occidental. We recently hosted an energy summit in Houston designed to explore how to strengthen Texas’ power grid.”