Florida Pulling $2 Billion From BlackRock As Company Pushes ‘Social-Engineering’ With Taxpayer Dollars

The state of Florida will divest $2 billion from BlackRock due to the asset management company’s efforts to advance the environmental, social, and governance movement, also known as ESG.
Florida CFO Jimmy Patronis announced that the Florida Treasury “will be taking its business elsewhere” for $1.4 billion worth of long-term securities and $600 million worth of short-term overnight investments by the beginning of next year. The official contended that the mission to “change the world” promoted by BlackRock CEO Larry Fink exposes the state’s resources to risks.
“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,” Patronis remarked in a press release. “Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for.”
The divestment appears to be the largest such effort among the other Republican state governments, which have recently pulled funds from prominent asset managers over concerns that the companies’ voting priorities, such as pressuring portfolio companies to transition away from fossil fuels, constitute the mismanagement of public assets. In addition to divestments from South Carolina, Louisiana, Missouri, West Virginia, and Utah, the government of Texas said that BlackRock and nine other firms had violated state law by “refusing to deal with” companies involved in the production and use of fossil fuels “without an ordinary business purpose.”
As the efforts from conservative state officials and broader concerns from the marketplace made headlines, Fink recently announced that institutional clients would be able to vote their shares rather than allow the firm to operate as a proxy. BlackRock has taken “voting action on climate issues” against dozens of its portfolio companies, according to an investment stewardship report, leading other officials to note that such activism might work against their state economies and could raise nationwide energy prices.
“The more effective we are in investing dollars to generate a return, the more effective we’ll be in funding priorities like schools, hospitals and roads,” Patronis added. “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.”
Patronis cited a letter from Fink arguing that access to capital is a “privilege” rather than a right.
“As Florida’s CFO I agree wholeheartedly, so we’ll be taking Larry up on his offer,” Patronis continued. “There’s no lack of companies who will invest on our behalf, so the Florida Treasury will be taking its business elsewhere.”
As macroeconomic headwinds persist, BlackRock is far from the only entity to suffer from ESG investments, which have underperformed over the past year largely due to overexposure to the technology sector and wholesale avoidance of fossil fuel investments. Harvard Management Company, which oversees the elite university’s endowment, reported a $2.3 billion loss in the most recent fiscal year and admitted that efforts to achieve net zero emissions through oil and gas divestment “weighed upon performance,” even though the organization remains “proud to be deeply engaged in the issue of sustainability.”
Go to Source Florida Pulling $2 Billion From BlackRock As Company Pushes ‘Social-Engineering’ With Taxpayer Dollars
The Daily Wire
December 1, 2022