Republican officials continued their inquiry into BlackRock this week, alleging that the financial giant has not been transparent about the influence of climate activists on its policies, according to a letter initially obtained by The Daily Wire.
In a letter addressed to BlackRock on Tuesday, 15 Republican attorneys general, led by Montana Attorney General Austin Knudsen, requested further clarification from BlackRock regarding its involvement in climate organizations and the nature of its environmental, social, and governance (ESG) policies. BlackRock, boasting assets exceeding $10 trillion, has come under fire from Republicans for allegedly prioritizing leftist activism over customer interests.
“I have serious concerns about BlackRock’s Environmental, Social, and Governance investments, their conflicting statements regarding ESG, and the potential conflicts of interest with independent fund directors,” Knudsen remarked to The Daily Wire. “Mutual fund directors have a fiduciary obligation to their clients to make them as much money as possible, but BlackRock appears to be more concerned with pushing the woke, liberal agenda.”
The 18-page communication highlights concerns about BlackRock’s contradictory statements regarding ESG, its involvement in leftist climate groups, and potential conflicts of interest.
While BlackRock recently disassociated from the Climate Action 100+ organization, it remains engaged in other initiatives such as the Net Zero Asset Managers initiative, the United Nations Principles for Responsible Investment, and Ceres. Notably, BlackRock International, a subsidiary, remains affiliated with the Climate Action organization.
Knudsen emphasized that while BlackRock “took a step in the right direction by dropping out of Climate Action 100+ earlier this month, it’s not enough.”
“BlackRock has made commitments to environmental activist groups that may conflict with the fiduciary duties it owes to clients, and we seek more information about how the independent directors have overseen this,” the letter states. “Further, BlackRock’s relationships with certain large institutional clients, especially state pension funds, may unduly influence BlackRock’s overall approach to engaging with companies in which it invests, including investments that have disclaimed any reliance or focus on ESG factors.”
The Republican attorneys general also criticized BlackRock for making misleading statements about the motives behind its ESG policies. The letter points out that while BlackRock claims its focus on climate and ESG is financially motivated, its performance in managing ESG funds lags behind non-ESG benchmarks while charging higher fees.
Moreover, the letter raises concerns about the independence of mutual fund directors at BlackRock and their ability to serve as directors on other corporations where BlackRock holds significant shares.
Apart from Montana, several other states including Alabama, Arkansas, Georgia, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nebraska, South Carolina, South Dakota, Texas, Virginia, West Virginia, and Utah signed the letter.
“Thanks to persistent efforts from Republican attorneys general to defeat the radical and illegal ESG movement, BlackRock and other investment firms have rightly withdrawn from certain environmental organizations committed to a foundational transformation of America’s energy and financial sectors,” remarked Utah AG Sean Reyes to The Daily Wire. “Our coalition, however, still has concerns with BlackRock’s past and present actions involving the financial interests of our constituents. We will remain steadfast in holding BlackRock and others like it accountable by protecting the financial freedom of our people.”
Republicans had previously written to BlackRock in July, expressing similar concerns, and received a reply in August. They contend that the August response failed to adequately address their questions or apprehensions about ESG investing. Tennessee sued BlackRock in December, alleging that the firm violated consumer protection laws by misleading consumers about its efforts to pursue left-wing social and environmental goals.
