The retirement savings of millions of federal workers are being weaponized to push climate change and DEI mandates, a watchdog warned lawmakers.
Financial asset giants BlackRock and State Street are leveraging their management over billions of dollars in federal employees’ retirement savings to push left-wing politics, according to a Monday letter to top Republican lawmakers from Consumers’ Research obtained by The Daily Wire. The pair manages around $668 billion in federal retirement savings through the Thrift Savings Plan, the federal government’s version of a 401(k) plan.
“Asset managers like BlackRock using Americans’ hard-earned money to unfairly and illegally push radical political agendas without consent is hardly a new problem, but their control of most of the Thrift Savings Plan takes the scandal to a new level,” Consumers’ Research executive director Will Hild told The Daily Wire. “Flagrantly violating fiduciary duty with federal employee dollars begs for congressional scrutiny and more.”
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The letter was sent to House Committee on Oversight and Government Reform Chair James Comer (R-KY) and Senate Committee on Homeland Security and Governmental Affairs Chair Rand Paul (R-KY). It requested that the lawmakers investigate the Federal Retirement Thrift Investment Board (FRTIB), the agency that administers the Thrift Savings Plan program.
The letter says that the agency “has contracted with asset managers and proxy advisors that have pursued goals to impose emissions reductions and diversity quotas on companies, rather than focus solely on financial returns as required” by federal law.
“Examples of BlackRock’s and State Street’s harmful conduct include: (1) using proxy voting power to push companies to adopt emissions targets; (2) maintaining commitments to climate-activist organizations in pursuit of Paris Agreement goals; (3) using internal proxy-voting guidelines that require using engagement and voting to pressure companies to align with net zero; (4) using pension fund assets to advance a net-zero agenda; and (5) succumbing to activist pressure to join climate groups and change their proxy voting to support activist proposals,” Hild wrote in the letter.
An example of political policies being pushed by BlackRock included voting in 2024 for a shareholder proposal to require Cracker Barrel to establish and publish greenhouse gas emissions targets. It backed similar proposals for companies like Jack in the Box, Wingstop, and Denny’s.
Hild cited previous policies by State Street to generally oppose company boards that are not “composed of at least 30-percent female directors” and “at least one director from an underrepresented racial/ethnic community.”
In recent years, BlackRock has backed away from some of its more recent pushes for activist investing after widespread backlash. In April 2024, the Committee to Unleash Prosperity gave BlackRock a “B” for its voting record on “extreme” shareholder proposals, up from a “C” the previous year. The same report grades State Street as a “C.”
“BlackRock’s CEO, Larry Fink, had been one of the leading voices in support of ESG a few years ago. But last year, under pressure from groups like ours and others, he began to retreat from its ESG advocacy on proxy voting as shareholder proposals have become more extreme,” the report found.
BlackRock’s recent global voting spotlight also highlighted that it voted with corporate management on 209 out of 214 votes in the Americas on climate and natural capital. “We again found that many of these proposals were over-reaching, lacked economic merit, or sought outcomes that were unlikely to promote long-term financial value,” the report said.
The letter also states that the Federal Retirement Thrift Investment Board relies on the Institutional Shareholder Services, a proxy advisory firm, for analysis of BlackRock and State Street’s proxy voting record. The firm is also “committed to environmental activism and imposing quotas on company boards,” Hild wrote.
The agency utilizes quarterly analysis from the Institutional Shareholder Services to ensure that BlackRock and State Street vote in line with their written guidelines.
“Reliance on ISS is contrary to [federal law’s] sole-interest standard, as ISS pursues an agenda that is incompatible with shareholder value and has made commitments to incorporate ESG into its processes. Contracting with ISS also raises concerns about ISS’s role in recommending votes that would inject race- and sex-based considerations into companies’ practices, which potentially violates federal and state civil rights laws,” Hild wrote.
Hild wants Congress to press the Federal Retirement Thrift Investment Board to ensure that federal workers’ retirement savings are not being used to push politics.
“The [FRTIB] owes the public answers, starting with whether it broke the law by allowing these notoriously woke firms to fund their ESG activism with millions of federal workers’ savings. The longer that firms like BlackRock freely manage Thrift Saving Plan assets, the greater the danger to so many Americans’ retirement security,” he said.