ESG investing is one of the primary reasons why many companies have evolved dramatically in recent years. BlackRock has come under investigation for pushing the ESG agenda.
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The investment giant BlackRock, as well as its subsidiaries and affiliates in the state, have been subpoenaed by the Texas legislature for papers pertaining to the institution’s promotion of environmental, social, and governance (ESG) practices.
The Texas Senate Committee on State Affairs filed the subpoena last month, asking the committee’s sergeant-at-arms or any peace officer in the state to summon BlackRock and affiliated businesses to testify before the committee on December 15. The summoned entities are required to present “books, papers, documents, or other tangible things in the said corporation’s possession, custody, or control” that are connected to “ESG factors” or “ESG integration practices,” according to the subpoena.
“The reason the committee is requesting the production of documents is to evaluate the investment practices of a financial services firm with a presence in Texas and how those practices affect the state’s public pensions,” it said.
Texas Republican state Sen. Bryan Hughes, chairman of the committee on state affairs, said in a statement to Fox that the subpoenaed records are essential to “uncover” the degree to which investment firms like BlackRock have been “playing politics using Texans’ hard-earned money.”
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In August, the committee requested records pertaining to ESG decision-making from BlackRock and other investment firms such as State Street, Vanguard, and Institutional Shareholder Services (ISS).
While every company has produced records, according to Hughes, some have submitted “more than others.” BlackRock, meanwhile, has “refused” to give any documents that it regards as confidential or internal.
As a result, the committee was forced to serve BlackRock with a subpoena. “They have a legal duty to put their investors’ interests first, and we intend to make sure they do,” Hughes added.
Instead of the traditional shareholder paradigm, ESG investing promotes stakeholder capitalism. Traditional investments, according to proponents of the concept, are solely focused on maximizing profits, but stakeholder-centric ESG investing incorporates social advocacy, the environment, and other progressive principles that they claim would benefit society and the corporation in the long term.
ESG investing is one of the primary reasons why many companies have evolved dramatically in recent years. Previously, corporations followed client demand; currently, they have mainly shifted toward alternative goals and sacrificed earnings in order to be “green” and politically right.
Action Against BlackRock, ESG Investing Perils
State authorities have taken a number of actions against BlackRock for its ESG investing practices. Florida Chief Financial Officer Jimmy Patronis declared on December 1 that his state will begin withdrawing $2 billion in assets from the investment firm.
Beginning next year, the state aims to totally liquidate its holdings in BlackRock and shift them to other fund management businesses.
Missouri announced its intention in October to remove $500 million in pension fund investments in BlackRock.
Previously, Louisiana announced a planned $794 million pullout from the firm, while Utah and Arkansas announced plans to remove $100 million and $125 million, respectively.
In a recent interview with Breitbart, Missouri Treasurer Scott Fitzpatrick contrasted ESG with leftist activism, pointing out that money managers are using people’s money to push political and social goals that may not even be in the financial interests of the investors.
“ESG is just the latest acronym to describe what people want them to believe for good, well-intentioned advocacy [when] it’s really just political advocacy for things that the Democrats cannot get passed through the democratic process, and they’re using your money to do it,” he said.