The government of Texas is revoking its $8.5 billion investment partnership with wealth management firm BlackRock on the grounds that its Environmental, Social, and Governance (ESG) advocacy is effectively a boycott against energy companies and is therefore detrimental to the Texan economy.
Chair of the Texas State Board of Education, Aaron Kinsey, told Fox Business that the Texas Permanent School Fund (Texas PSF) is terminating a previously established contract with BlackRock. Its justification is a 2021 Texas law that established a precedent for cutting ties with institutions that boycott the oil and gas sector, a crucial industry for the state’s economic growth.
Texas yanks $8.5B from Larry Fink’s BlackRock in ‘massive blow against the scam of ESG’ https://t.co/UwNS8buuOe pic.twitter.com/9rK5ivJ7KM
— New York Post (@nypost) March 19, 2024
Texas PSF was created in the 1800s to financially support Texas public schools. The BlackRock partnership represented a large slice of its current $53 billion budget. It is also the largest anti-ESG action taken by the state since Senate Bill 13 was passed.
“The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office,” Kinsey said. “Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.”
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“BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF. Texas and the PSF have worked hard to grow this fund to build Texas’ schools,” he continued. “BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.”
SB 13 requires the Texas state comptroller to list financial companies that are actively boycotting oil and gas companies.
“Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street,” Kinsey said. “This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.”
“Today’s bold step by Aaron Kinsey and the Permanent School Fund of Texas, in accordance with state law, is a massive blow against the scam of ESG,” said Derek Kreifels, CEO of State Financial Officers Foundation. “This is what happens when public fiduciaries stand up for those to whom they owe a duty, instead of bowing down to Wall Street’s asset managers who continue to abuse their position in the market to advance radical ideologies.”
Shane Devine is a writer covering politics, economics, and culture for Valuetainment. Follow Shane on X (Twitter).
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