Republican state leaders are on the warpath against BlackRock, the largest financial asset manager in the nation.
The company’s sin? Statements by BlackRock leadership that climate change is a long-term threat, and that the company will pursue investments that promote a reduction in emissions.
In January, West Virginia declared that it was barring the company from managing its state pension funds. Texas passed legislation in February prohibiting any firm divesting from fossil fuels from managing state assets. In March, the Arkansas State Treasurer March withdrew $125 million from money market accounts managed by BlackRock. This followed a letter last year sent by a dozen Republican state treasurers threatening to pull funds from banks that had made commitments in line with the Paris climate accord to stop financing new fossil fuel investments.
Despite Chairman Larry Fink’s bold statement, in his annual letter to CEOs, that “every government, company, and shareholder must confront climate change,” BlackRock pledged in a February letter to Texas officials, “We will continue to invest in and support fossil fuel companies.”
As a company holding investments in nearly every major firm in the nation, BlackRock’s change of tune did not amount to an actual change in policy—since the firm hadn’t actually divested from anything—but it still sounded like a defeat to progressives.
In reality, though, the reason red states are scrambling to pass such legislation and make these threats is because they are losing the fight. Fossil fuel firms are facing disinvestment campaigns all over the country mounted by grassroots activists. Thanks to this pressure, BlackRock and the two other largest top managers of retirement funds, Vanguard and State Street, have pledged to use their voting power in corporate governance to support a transition to a net-zero-emissions economy over time with the investments they manage.