BlackRock took a massive hit this week from Gov. Ron DeSantis’ administration.
Florida’s Chief Financial Officer, Jimmy Patronis, announced Thursday that the Florida Treasury is set to divest over $2 billion in state taxpayer funds from the investment firm, which is billed on its website as “one of the world’s leading providers of investment, advisory and risk management solutions,” according to Florida’s Voice.
Patronis cited his lack of trust in BlackRock’s ability to return good numbers for Florida taxpayers, saying the company is prioritizing social and environmental justice initiatives over profits.
Patronis, in a Wednesday news release, said, in no uncertain terms, that he believes BlackRock is focused more on boosting its Environmental, Social, and Governance, or ESG, scores than sticking to the best “bottom line” investment strategies to benefit investors.
“As major banking institutions and economists predict a recession in the coming year, and as the Fed increases interest rates to combat the inflation crisis, I need partners within the financial services industry who are as committed to the bottom line as we are – and I don’t trust BlackRock’s ability to deliver,” the statement read.
It added, “Whether stakeholder capitalism, or ESG standards, are being pushed by BlackRock for ideological reasons, or to develop social credit ratings, the effect is to avoid dealing with the messiness of democracy. I think it’s undemocratic of major asset managers to use their power to influence societal outcomes.”
“If Larry [Fink, BlackRock CEO], or his friends on Wall Street, want to change the world – run for office. Start a non-profit. Donate to the causes you care about,” the statement continued. “Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for.”
Until this news, BlackRock had managed $1.43 billion of long-term securities for the state of Florida and another $600 million, approximately, in short-term investments.
The news release added a timeline of when the divestment period will have been completed.
“By the beginning of 2023, the State Treasury will have divested from BlackRock’s management of all short and long-term investments and relocated investment responsibilities to other fund management entities,” the release read.
Reuters called the Florida Treasury’s move the “largest anti-ESG divestment” on record.
The divestment decision inspired others to call on their state’s governors to allow their treasuries to make the same moves.
“Florida to pull $2 BILLION worth of its assets managed by BlackRock, the biggest such divestment by a state opposed to the asset manager’s environmental, social and corporate governance (ESG) policies. – Reuters @GregAbbott_TX, does Texas have assets with Blackrock? Pull them,” one Twitter user wrote.
🚨Florida to pull $2 BILLION worth of its assets managed by BlackRock, the biggest such divestment by a state opposed to the asset manager’s environmental, social and corporate governance (ESG) policies. – Reuters@GregAbbott_TX, does Texas have assets with Blackrock? Pull them.
— Jason Howerton (@jason_howerton) December 1, 2022
Gov. Greg Abbott touched on the news concerning Florida’s divestment, reminding his followers that he signed legislation into law last year prohibiting the state from using investment firms with anti-fossil fuel policies.
“Texas was the first state to ban BlackRock from doing business with our state. I signed a law in 2021 to ban financial companies that have ESG policies that discriminate against the oil & gas sector. That includes BlackRock and several other financial companies,” Gov. Abbott tweeted Thursday.
Texas was the first state to ban BlackRock from doing business with our state.
I signed a law in 2021 to ban financial companies that have ESG policies that discriminate against the oil & gas sector.
That includes BlackRock and several other financial companies. https://t.co/AkXMYfAShh
— Greg Abbott (@GregAbbott_TX) December 1, 2022
For its part, BlackRock responded to Patronis’ move in a defensive tone, adding that it believes politics are making such decisions an “emerging trend.”
“We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics,” BlackRock said in a statement, according to Reuters.
When they formally take majority control of the U.S. House of Representatives, GOP lawmakers are expected to hold hearings on ESG issues. They will reportedly grill top executives from companies like BlackRock to determine whether ESG is prioritized over traditional profit-driven investment strategies.
This article appeared originally on The Western Journal.