Florida is ripping off $2 billion in public assets managed by BlackRock, escalating the GOP standoff with the world’s largest fund manager over its ESG investment policies.
The Treasury will freeze about $1.43 billion in long-term securities and remove BlackRock as manager of about $600 million in overnight short-term investments in a bid to give that business to other fund managers by early 2023, the Florida chief said. Financial officer Jimmy Patronis said in a statement Thursday.
Republicans, who say liberals are using environmental, social and corporate governance investment strategies to advance an ideological agenda that would be voted down at the ballot box, have slammed “woke” companies and fund managers, s committing to reduce ESG by $40 trillion. investment firm.
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Florida Governor Ron DeSantis is a key figure in the Republican uprising and BlackRock CEO Larry Fink is a frequent target.
In August, DeSantis, widely expected to challenge former President Donald Trump for the 2024 GOP presidential nomination, pushed through a resolution calling on Florida to stop considering the “ideological agenda” of the ESG movement when investing. of public funds.
“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, who oversees the services department financial institution of Florida which manages approximately 60 billion dollars in taxpayers. money, said in a statement.
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“I think it is undemocratic for large asset managers to use their power to influence societal outcomes. 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. However, using our money to fund BlackRock’s social engineering project is not something Florida has ever signed up for.
Treasurers in Louisiana and Missouri have made similar moves.
BlackRock, which oversees $8 trillion, released a statement accusing Florida of putting politics before performance.
“As a fiduciary, everything we do is for the sole purpose of generating returns for our clients. We are surprised by the Florida CFO’s decision given the strong returns BlackRock has delivered to Florida taxpayers over the past five years,” the company said. “We are troubled by the emerging trend of policy initiatives like this that sacrifice access to high-quality investment and thereby undermine returns, which will ultimately hurt the citizens of Florida.”
What is ESG?
Fink has been spending time in Washington to “correct the narrative” after criticism from the political right that he has gone too far with ESG investing and from the political left that he has not gone far enough, a- he said Wednesday during an interview with the New York Times. York Times Deal Book Summit.
Conservatives are going after companies that are more vocal on social, environmental and governance issues, commonly referred to as ESG.
ESG investors consider a company’s performance on environmental and other issues when evaluating an investment. ESG proponents say this type of investing highlights risks such as exposure to climate change or workforce diversity and inclusion issues that might otherwise be overlooked.
But the GOP sees ESG as a Trojan horse for leftist politics. In recent months, Republicans have intensified their pressure campaign to prevent corporate America from taking liberal positions, with punitive measures ranging from boycotts to legislation to shareholder fights.
Now that Republicans will regain control of the House of Representatives in January, conservative lawmakers are threatening political consequences, including kicking fund managers out of congressional ESG hearings.