(Reuters) – Florida’s chief financial officer said on Dec. 1 that he would withdraw $2 billion from BlackRock’s assets under management. (BLK.N)This is the largest divestment by the state against the environmental, social and corporate governance (ESG) policies of asset managers.
The move had little impact on BlackRock’s $8 trillion in assets and elicited a strong response from the company. The company said the move puts politics above investor interests. That said, it is clear that there is a growing backlash against ESG investing among many Republican leaders, including those in Florida.
Republicans are set to take control of the US House of Representatives in January.this will Allow ESG hearings It also asked chief executives of BlackRock and other major asset managers about their ESG policies and pressured regulators to scrutinize them.
In a statement, Florida CFO Jimmy Patronis said the state’s Treasury Department, which he oversees, had fired BlackRock as the manager of a short-term investment of about $600 million, giving it a custodian position now held by BlackRock. It said it would freeze $1.43 billion in long-term securities that it owns. On redistributing funds to other money managers by early 2023.
Patronis accused BlackRock of focusing on ESG over higher returns for investors.
“We are selling from BlackRock because Florida’s Treasury Department openly stated it had goals other than generating a profit,” Patronis said.
Asked about the move, BlackRock said in a statement: Politics. “
Neither Patronis nor his office have raised concerns about performance, BlackRock said, adding that it has invested more than $65 billion in Florida-based companies, municipal bonds and other securities.
BlackRock has encouraged portfolio companies to take steps, such as disclosing more data on their carbon emissions and adding more diverse board members, but those efforts have not been shown to improve company performance. US Democratic officials have argued that BlackRock did not advocate enough of its ESG concerns. read more
So far, only Republican-controlled states have made large-scale redistributions from BlackRock, including $794 million withdrawn by Louisiana treasurers. read more $500 million from Missouri state treasurers (both October).
Other companies also face Republican scrutiny.Earlier this week, Republican attorneys general in various states Asked Federal regulators restrict Vanguard Group Inc’s activities on ESG concerns, Asked United Parcel Service Co., Ltd. (UPS.N) and FedEx (FDX.N) To clarify our policy on tracking firearm shipments.
Reported by Ross Kerber.Edited by Chiju Nomiyama
Our criteria: Thomson Reuters Trust Principles.
