Even BlackRock is too woke for Florida after the state gave away $2 billion over stakeholder capitalism and ESG

The world’s largest asset manager, black rockis under fire for being too awake.

Despite its role as pipeline finance-and $171 billion in investments in public American oil and gas companies – American states such as Louisiana, Texas and West Virginia have target BlackRock for its environmental, social and governance (ESG) initiatives this year. And now Florida is piling up.

Sun State CFO Jimmy Patronis didn’t throw a punch in a Thursday Statement announcing that it would begin divesting $2 billion of taxpayer assets managed by BlackRock due to its ESG stance.

“Whether stakeholder capitalism or ESG standards are pushed by BlackRock for ideological reasons or to develop social credit ratings, the effect is to avoid dealing with the mess of democracy,” he said. declared. “It is undemocratic for large asset managers to use their power to influence societal outcomes.”

In an email to Fortunea BlackRock representative pointed out evidence that BlackRock is not the only Florida-invested fund whose management has expressed support for ESG initiatives and chastised Patronis statements.

“We are troubled by the emerging trend of policy initiatives like this that sacrifice access to high-quality investments and thereby undermine returns, which will ultimately hurt the citizens of Florida,” they wrote. “Fiduciaries should always value performance over politics.”

In its statement, Patronis went on to say that BlackRock CEO Larry Fink is “campaigning to change the world”, referring to a annual letter to shareholders where Fink said CEOs should work to fight climate change and embrace “stakeholder capitalism” – a policy that not only serves shareholders, but also employees, customers and the general public.

Patronis said the letter was an example of BlackRock policing “who should and who shouldn’t have access to capital” and offered a stern rebuke of Fink’s views on capitalism.

“If Larry, or his friends on Wall Street, want to change the world, run for office. Start a nonprofit organization. Donate to the causes you care about,” he said. “Using our money, however, to fund BlackRock’s social engineering project is not something Florida has ever signed on to. It has nothing to do with maximizing returns and is the opposite of what what an asset manager gets paid for.”

Fink has come under fire from conservative politicians for his calls for businesses to get serious on their net zero emissions goals. In Texas, the company was even put on the “disinvestment list” financial companies that boycott energy companies—although BlackRock said its energy investments are evidence “completely at odds with any notion of a boycott.”

For his part, Fink said in its letter to shareholders that it focuses on ‘sustainability’ and responds to customer concerns, stating that ‘climate risk is an investment risk’.

“No issue ranks higher than climate change on our clients’ priority lists,” Fink wrote. “They ask us about it almost every day.”

But then Patronis questioned BlackRock’s ability to generate strong returns due to its ESG-focused approach.

“As Florida’s CFO, it’s my responsibility to get the best possible returns for taxpayers,” he said. “As major banking institutions and economists predict a recession in the coming year, and the Fed raises interest rates to combat the inflation crisis, I need partners within of 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.

BlackRock said in a statement to Fortune that as a fiduciary, their “sole purpose” is to generate returns for their clients.

“We are surprised by the Florida CFO’s decision given the strong returns BlackRock has provided to Florida taxpayers over the past five years. Neither the CFO nor his staff raised any performance issues. they wrote.

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