Texas Cuts Ties With BlackRock, Other Woke Firms Over Their Hatred For Fossil Fuels

Texas Cuts Ties With BlackRock, Other Woke Firms Over Their Hatred For Fossil Fuels

The state government of Texas is cutting ties with BlackRock, UBS, and other firms that are hostile toward fossil fuels, Texas Comptroller Glenn Hegar revealed on Wednesday.

In accordance with state law, Hegar identified eight firms that are “refusing to deal with” or “terminating business activities with” companies involved in the production and use of fossil fuels “without an ordinary business purpose.” Based upon an evaluation of their commitment to environmental, social, and governance (ESG) objectives — which, in some cases, included pledges to third-party climate advocacy groups like Net Zero Banking Alliance — Hegar determined that state entities were not permitted to work with 10 companies.

“The environmental, social and corporate governance movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Hegar said in a statement. “This research uncovered a systemic lack of transparency that should concern every American regardless of political persuasion, especially the use of doublespeak by some financial institutions as they engage in anti-oil and gas rhetoric publicly yet present a much different story behind closed doors.”

The official named BlackRock, BNP Paribas, Credit Suisse, Danske Bank, Jupiter Fund Management, Nordea Bank, Schroders, Handelsbanken, Swedbank, and UBS as financial entities that “boycott energy companies.” State government entities are “prohibited from investing in” and must “divest from” the listed companies, although some exceptions may exist.

BlackRock, which manages $8.5 trillion in client assets, rejected Hegar’s deliberation. “Elected and appointed public officials have a duty to act in the best interests of the people they serve,” BlackRock said in a statement to Reuters. “Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty.”

As Hegar’s evaluation revealed, BlackRock has vowed to pursue a path toward net zero greenhouse gas emissions by 2050 or sooner. BlackRock CEO Larry Fink wrote in his 2022 letter to CEOs that “climate risk is investment risk.”

“This is just the beginning — the tectonic shift towards sustainable investing is still accelerating,” he said. “Whether it is capital being deployed into new ventures focused on energy innovation, or capital transferring from traditional indexes into more customized portfolios and products, we will see more money in motion.”

Socially conscious investing, however, has suffered during the most recent stock market downturn through high exposure to the technology sector amid avoidance of fossil fuel investments. For instance, BlackRock’s iShares ESG Aware MSCI ETF — which has its largest holdings in companies like Microsoft, Tesla, and Alphabet — is down over 14% since the beginning of 2022, slightly lower than the overall S&P 500 index. Meanwhile, BlackRock’s iShares Global Energy ETF — dominated by oil and gas conglomerates like Exxon Mobil, Chevron, and Shell — has risen 40% over the same time period.

Many entities that have continued their investment in fossil fuels have reaped record returns despite stock market volatility. The University of Texas, which earns $6 million per day through its 2.1 million acres of oil fields in the Permian Basin, is poised to maintain the nation’s largest university endowment, as elite schools like Harvard University continue to rely upon stock market assets, private equity, and venture capital.

Harvard Management Company, which manages the school’s investments, has also set the explicit goal of achieving a net zero emission portfolio by 2050.

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