Publisher's Note: This post appears here courtesy of the The Daily Wire. The author of this post is Ben Zeisloft.
South Carolina State Treasurer Curtis Loftis intends to pull the state's remaining $200 million of holdings in asset management company BlackRock by the end of the year.
Loftis is the latest of several conservative state officials to argue that environmental, social, and governance (ESG) investing represents an advancement of values not held by his constituents. "I will not allow our financial partners to undermine my fiduciary responsibility to maximize investment returns while accepting a prudent level of risk for the benefit of our citizens,"
he said in a Monday statement to the Washington Examiner. "It is imperative that we stand up to BlackRock and resist the pressure to simply fall into line with their leftist worldview."
The move follows the state of Louisiana announcing its intentions earlier this month to divest from BlackRock until a total of $794 million is removed from the company. Weeks earlier, the state of Texas said that BlackRock and nine other firms had 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."
Companies that adopt ESG goals, often at the behest of asset managers such as BlackRock, may hire with respect to racial identity while deprioritizing merit, push green energy standards, or otherwise blend profits with progressive social and political agendas. Loftis said during an interview with CNBC that many residents of the Palmetto State are unaware of the degree to which ESG investing opposes their values.
"People are shocked. The average person, smart people - they've heard of ESG, but they don't know what it really means,"
he said. "They see it as a betrayal. It's another group of institutions that have betrayed them, that have gone out and worked hard to advance ideology that they don't believe."
BlackRock contended in a recent letter to state attorneys general that the officials inaccurately portray ESG as a departure from the maximization of profits, asserting that entities which assume a "forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes."
The firm, which manages $8.5 trillion in client assets, has taken "voting action on climate issues"
against dozens of its portfolio companies, according to an investment stewardship report.
"There are investment risks and opportunities associated with a transition to a low-carbon economy,"
the letter explained. "As the recent historic floods across the country as well as the droughts and wildfires throughout the West and around the world this past year have shown, climate change is testing the resilience of many industries and businesses."
Louisiana State Treasurer John Schroder, who met with BlackRock representatives before advancing his state's divestment, noted that comments made during his recent meeting with representatives from the company "contradicted most of the public messaging"
he has heard BlackRock CEO Larry Fink advance in the media.
"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 a letter. "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."