Texas lawmaker subpoenas BlackRock for ESG-related documents
Zachary Halaschak
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A Texas state senator has subpoenaed BlackRock to hand over documents related to environmental, social, and governance initiatives — another instance of Republican backlash against the investment firm.
GOP state Sen. Bryan Hughes filed a subpoena to compel BlackRock to hand over ESG-related documents, and he is seeking for BlackRock CEO Larry Fink and others to appear before the State Affairs Committee, which he heads, to answer questions. While dated last month, the subpoena was made public on Wednesday.
Over the summer, the State Affairs Committee requested documents from BlackRock and other major money managers, including State Street, Vanguard, and Institutional Shareholder Services, related to ESG and how it affects the state’s public pensions. The firms were given until Sept. 9 to comply with the request.
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Hughes said in a statement that BlackRock stood out among the firms in that it didn’t provide the committee with the documentation it requested. He said that while each money manager turned over documents, some have offered more than others.
“BlackRock in particular has refused to provide documents it considers internal or confidential. Accordingly, we have issued a subpoena to BlackRock for the production of additional documents the committee needs to complete its work. We will not allow these firms to continue to use Texans’ money to force a narrow political agenda,” said Hughes.
The committee also is requesting representatives from all four major firms to attend a hearing it plans to hold next week.
The Washington Examiner asked BlackRock for comment.
BlackRock has increasingly become a target for Republicans seeking to combat ESG, which proponents argue is a way that finance and business can help reform society, such as by mitigating the effects of climate change. Those who oppose ESG say it distorts the economy, as well as America’s culture, through capital and influence.
Several red states have launched broadsides against BlackRock, which is the world’s largest money manager.
Earlier this month, Florida’s chief financial officer said the state will divest some $2 billion from BlackRock, the largest such state divestment from the money manager yet over its stance on environmental and social goals.
“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,” said Florida CFO Jimmy Patronis.
Several other GOP-led states have also moved to divest state funds from BlackRock over the past year as combating ESG becomes a more salient political topic among Republicans.
BlackRock, in turn, has been working to rebut characterizations that it is “boycotting” the energy industry and has gone “woke” in its investment strategies.
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In October, BlackRock launched a webpage committed to “setting the record straight” about how it handles investment decisions and disclosure and its pursuit of ESG. BlackRock says its views on climate risk aren’t unique, and its new webpage noted that an overwhelming majority of companies in the S&P 500 publish sustainability reports.
“The energy industry plays a crucial role in the economy, and, on behalf of our clients, BlackRock has invested $170 billion in U.S. public energy companies,” the page read. “We are also partnering with energy companies and start-ups to fund new technology and innovations that will power the global economy, now and in the future.”