State-run funds in Texas can now invest with the $11T BlackRock Inc., the world’s largest asset management firm, since the investment organization has made adjustments to its environmental, social and governance policy.
After three years, Texas comptroller Glenn Hegar has finally removed Larry Fink’s investment organization from the list of financial institutions that are boycotting the oil and gas industry, according to a press release. Listed companies are subject to the divestment provisions outlined in Texas’ state law.
“I am pleased to announce a significant decline in the number of investment funds that boycott the oil and gas industry, as well as the removal of BlackRock Inc. from the comptroller’s office list of companies that boycott energy companies,” said Hegar, in a statement. “This is a meaningful victory and validates the leadership Texas has shown on this issue, which has seen a monumental shift in the way companies, governments and individual Americans view the energy sector.
The list was developed in August 2022, with BlackRock added along with other asset managers such as UBS and BNP Paribas. State entities subject to the investment prohibitions and divestment requirements in the statute include the Employees Retirement System of Texas, Teacher Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System, and the Texas Permanent School Fund Corp.
During the Aspen Ideas Festival in 2023, Fink remarked that he had stopped using the “ESG” acronym, noting it had become “entirely weaponized” by the far left and far right. Later in the conversation, he backtracked, saying “I’m not ashamed. I do believe in conscientious capitalism.”
However, last year, BlackRock said it was stepping back from full participation in Climate Action 100+, a group focused on reducing greenhouse gas emissions. In a letter to the group’s steering committee in February 2024, the investment organization said “changes that Climate Action 100+ has made to its strategy” led the firm to transfer its participation in the group to BlackRock International, adding that “BlackRock, Inc. will no longer be a signatory.”
And in January, BlackRock announced its withdrawal from the Net Zero Asset Managers initiative, saying its memberships in some of these organizations “have caused confusion regarding BlackRock’s practices” and subjected it “to legal inquiries from various public officials.”
Hegar cited BlackRock’s step back from full participation in the Climate Action 100+ and exit from the Net Zero Asset Managers initiative as factors in the decision to delist the investment firm.
“The firm also has acknowledged the real social and economic costs, both in Texas and globally, that come from limiting investment in the oil and gas industry,” Hegar added. “In short, it is engaging in a more intellectually honest conversation.”
