Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.
Louisiana State Treasurer John Schroder announced on Wednesday that the Pelican State would divest nearly $800 million in funds from asset management company BlackRock.
In a letter to BlackRock CEO Larry Fink, the official explained that environmental, social, and governance (ESG) investing violates Louisiana state law on fiduciary duties, which require "a sole focus on financial returns for the beneficiaries of state funds."
Other conservative states have made similar decisions in recent months.
"This divestment is necessary to protect Louisiana from mandates BlackRock has called for that would cripple our critical energy sector,"
Schroder said in a press release provided to The Daily Wire. "I refuse to spend a penny of Treasury funds with a company that will take food off tables, money out of pockets and jobs away from hardworking Louisianans."
The state of Louisiana has already pulled $560 million from BlackRock and intends to continue strategically divesting until a total of $794 million is removed from the company. Schroder noted in his letter that comments made during his recent meeting with BlackRock representatives "contradicted most of the public messaging"
he has heard Fink advance in the media.
Indeed, Fink wrote in his most recent letter to chief executives that "climate risk is investment risk."
BlackRock, which manages $8.5 trillion in client assets, has taken "voting action on climate issues"
against 53 of its portfolio companies in 2020 while putting 191 others "on watch,"
according to its investment stewardship report.
"This divestment is necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector,"
Schroder told Fink. "In my opinion, your support of ESG investing is inconsistent with the best economic interests and values of Louisiana. I cannot support an institution that would deny our state the benefit of one of its most robust assets. Simply put, we cannot be party to the crippling of our own economy."
The divestment follows a recent analysis from Texas Comptroller Glenn Hegar, which found that BlackRock and nine other firms have violated state law by "refusing to deal with"
or "terminating business activities with"
companies involved in the production and use of fossil fuels "without an ordinary business purpose."
In comments provided to The Daily Wire, State Financial Officers Foundation CEO Derek Kreifels noted that other states - including Utah, West Virginia, and Arkansas - have likewise rejected the "weaponized"
ESG movement. "Their reckless agenda is robbing Americans of their retirement dollars and driving up the costs of everyday goods like groceries, gas, and energy,"
Amid state governments' moves to spurn ESG investment, the Securities and Exchange Commission (SEC) is developing requirements that would force companies to report the material impact climate change presents to operations, the impact of "climate-related events"
such as severe weather on transaction activities, and risk management processes used to mitigate climate risk.
A recent poll from CNBC showed that a mere 25% of chief financial officers support the policy, largely due to a lack of connection between the costs their businesses would incur by submitting the disclosures and the generation of profits.