Missouri Jumps on Anti-ESG Bandwagon, Pulling $500 Million from BlackRock
Missouri State Treasurer Scott Fitzpatrick announced on Tuesday that the state’s pension fund, the Missouri State Employees’ Retirement System (MOSERS), has sold all public equities managed by BlackRock, totaling approximately $500 million, claiming that BlackRock prioritizes “a woke political agenda above the financial interests of their customers.”
The announcement marks the latest move in an ongoing anti-ESG push by Republican politicians in the U.S., which has recently culminated in actions such as Florida passing a resolution to no longer allow ESG considerations to be used by fund managers for its $228 billion of pension funds, Texas publishing a list of fund managers – including BlackRock, Credit Suisse, UBS and several others – slated for potential divestment from its pension funds, due to their strong ESG credentials and support for net zero investing and advocacy, and Louisiana announcing a planned divestment from BlackRock funds of nearly $800 million in order to “protect” the state’s Treasury funds “from ESG.”
BlackRock, as the largest global investment management company, and a leading voice in the investment community on climate change and energy transition-related themes, has found itself at the center of many of these efforts. In August, 19 Attorneys General signed a letter accusing BlackRock of acting with “mixed motives” in its pursuit of an anti-fossil fuel and pro-net zero agenda for following a “social purpose” not aligned with a focus on financial returns.
In the statement from Fitzpatrick’s office, the Treasurer said that the MOSERS board directed BlackRock in June to abstain from voting proxies on the plan’s behalf, “due to concerns with their public statements and record of prioritizing ESG initiatives over shareholder return,” but claimed that BlackRock refused the request, leading to the decision to sell the equity holdings.
In a recent letter responding to the Attorneys’ General claims, BlackRock Head of External Affairs Dalia Blass, pointed out that BlackRock has given its clients, including the states’ pension funds, the ability to pursue their own agendas in proxy voting. Last year, the firm introduced the BlackRock Voting Choice program, giving clients the ability to apply their own stewardship preferences if they wish.
Blass also wrote that the firm is “disturbed by the emerging trend of political initiatives that sacrifice pension plans’ access to high-quality investments – and thereby jeopardize pensioners’ financial returns.”
Fitzpatrick made similar claims to the Attorneys General, saying that some investment managers have abdicated their fiduciary duties “in favor of forcing a left wing social and political agenda that has failed to succeed legislatively, on publicly traded companies.”
“It is past time that all investors recognize the massive fiduciary breach that is taking place before our eyes, and do something about it.”