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Texas Removes BlackRock from Investment Blacklist
Texas has made the decision to remove BlackRock from a blacklist of companies that were previously barred from receiving the state’s investment funds. This move comes three years after the asset manager was targeted for its environmental policies. The state’s comptroller, Glenn Hegar, announced that Texas pension and investment funds, totaling about $300 billion in assets, are now able to purchase BlackRock shares and invest in its funds. State-run funds are also permitted to seek financial advice and risk management guidance from the New York-based group.
BlackRock’s Recent Actions
Earlier this year, BlackRock made the decision to withdraw from the UN-sponsored climate coalition, known as the Net Zero Asset Managers, and also stepped back from the Climate Action 100+ group in 2024. This shift in stance has been seen as a victory for Texas lawmakers and the oil and gas industry, who have been working to counter efforts by asset managers to address climate change through their investment strategies.
Hegar’s Statement
In response to the decision to remove BlackRock from the blacklist, Hegar stated, “This is a meaningful victory and validates the leadership Texas has shown on this issue, which has seen a monumental shift in the way companies, governments, and individual Americans view the energy sector.” BlackRock has not yet provided a comment on the matter.
Legal Battles and Policy Changes
BlackRock has faced criticism from Republican-voting states, with some passing laws that restrict how states engage with companies that have certain environmental, social, and governance policies. The company is currently involved in a legal dispute with the Texas attorney-general, who has accused BlackRock and its competitors of manipulating energy markets as part of their green energy policies. BlackRock has vehemently denied these allegations.
CEO Larry Fink’s Evolution
BlackRock CEO Larry Fink, who was once a vocal advocate for corporate environmental action, has faced scrutiny in recent years as conservative policymakers have sought to curtail the influence of the asset manager. Fink’s 2020 letter to chief executives highlighted the importance of addressing climate risk as investment risk, but BlackRock has since distanced itself from the ESG movement, which Fink believes has been weaponized.
Moving Forward
Hegar emphasized that the intention behind including BlackRock on the blacklist was never to punish the firm, but rather to encourage policy changes. He commended BlackRock for limiting its support for activist investors focused on reducing fossil fuel usage, citing a real commitment to policy changes and a desire to be a trusted partner.
Overall, Texas’ decision to remove BlackRock from the blacklist signals a shift in the state’s approach to environmental policies and investment strategies. It remains to be seen how this decision will impact BlackRock’s future relationships with clients and its position in the market.
