ESG standards will result in “crippling our own economy,” wrote Louisiana State Treasurer John Schroeder.
FIRST TIME ON FOX: Louisiana told megabank BlackRock on Wednesday that it would pull out of the firm’s investment portfolio due to its anti-fossil fuel policy.
Louisiana Treasurer John Schroeder wrote a letter to BlackRock CEO Larry Fink explaining that the state would liquidate all BlackRock investments within three months and, over time, divest nearly $800 million from the bank’s money market funds, mutual funds, or exchange-traded funds. . The State Treasurer criticized Fink’s push for so-called environmental, social and governance standards (ESG), which promote green energy over traditional fossil fuels.
“Your blatant anti-fossil fuel policies will destroy Louisiana’s economy,” Schroeder wrote to Fink in a letter first received by FOX Business.
“This sale is necessary to protect Louisiana from actions and policies that will actively seek to undermine our fossil fuel sector. In my opinion, your support for investment in ESG is inconsistent with Louisiana’s best economic interests and values,” he continued. “I cannot support an institution that denies our state the use of one of its most trusted assets.”
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“To put it simply, we cannot participate in the destruction of our own economy.”
Schroeder added that he refused to spend a single cent of public funds on a firm that would “take food off tables, money out of pockets, and jobs from hard-working Louisians.”
According to the Energy Information Administration, including offshore production, Louisiana ranks second in oil production and third in natural gas production in the nation. The energy industry is the state’s largest sector, accounting for 8.1% of Louisiana’s total gross domestic product.
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The treasurer noted in the letter that the state has already withdrawn $560 million from BlackRock’s investment, and that figure will increase to $794 million by the end of the year under his agency’s plan.
BlackRock and several other major financial institutions have spearheaded efforts to advance ESG standards over the past few years. The main pillar of the ESG movement is the use of publicly traded funds to incentivize a “net zero” transition from fossil fuels to green alternative energy sources such as wind and solar.
But firms have recently faced increased pressure from Republican-led states and groups such as the Public Financial Officers Foundation, which have criticized ESG’s policies as anti-democratic and, in some cases, illegal.
“Consumers’ Research applauds Treasurer Schroeder’s commendable decision to remove government assets from illegal use of BlackRock,” Consumer’s Research chief executive Will Hild said in a statement to FOX Business. “As his letter notes, BlackRock is using Louisiana money to advance a destructive program that is driving up costs for consumers in the state and across the country.”
“The seeds of today’s energy crisis were sown by BlackRock and others in their reckless abandonment of their fiduciary duties of sucking up to radical, awakened politicians,” he continued. “We’re happy to see the Treasurer working to put an end to their economic vandalism.”
In late July, West Virginia became the first state to penalize banks that adhere to ESG standards. Several other states, including Louisiana, Texas, Kentucky, Oklahoma, Florida, South Carolina, Arizona, Idaho, Utah, Wyoming, Arkansas and North Dakota, told FOX Business at the time that they were ready to take similar action.
BlackRock declined to comment on Schroeder’s letter, but pointed FOX Business to a letter it sent to 19 Republican attorneys general in September.
“We are concerned about an emerging trend of policy initiatives that are sacrificing pension plans’ access to high-quality investments — and thereby jeopardizing the financial returns of retirees,” the firm wrote to government officials on Sept. 7.
Credit: www.foxbusiness.com /