A group of Republican state officials has fired another salvo in a war against BlackRock over its embrace of environmental, social, and governance standards and investment in China, this time demanding information from the firm's mutual fund directors.
Utah Treasurer Marlo Oaks led a letter with 14 other Republican financial officers from across the country. The letter grills the directors over BlackRock's efforts to mitigate climate change and integrate ESG standards into the firm, demanding that the recipients provide answers about any "potential conflicts of interest" they may have.
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The missive is a follow-up letter to one sent to the group by several GOP state attorneys general back in July.
“We are concerned about whether your board is sufficiently independent to supervise BlackRock’s performance as an investment adviser,” the officials wrote. “Apparently, most of you are either employed by BlackRock or hold additional positions as board members of publicly traded companies in which BlackRock owns a sizeable share."
“As a result, for most of you, BlackRock appears to wield significant influence over matters that could directly affect your compensation and your continued status as board members,” they added.
The group of state financial officers raised concerns about the board’s “potential lack of oversight” as it pertains to accusations against BlackRock that it is using client assets to advance “an ideological agenda.”
They note that the money manager has expressed a desire to support the Paris Agreement and work to get companies to lower greenhouse gas emissions all the way down their value chains with the goal of achieving net zero by 2050.
“Moreover, it appears that BlackRock made these commitments in response to outside pressure from large institutional clients whose political interests do not align with the purely financial interests of BlackRock’s many retail investors,” the letter reads.
Republican state treasurers and attorneys general have been hitting at BlackRock for its embrace of ESG for the past couple of years. The conservative group Consumers’ Research has also bought multimillion-dollar ad buys railing against the firm.
The state financial officers also attacked BlackRock for its ties to China and because it was the first foreign-owned company allowed to offer a set of mutual funds and other investment products for Chinese consumers.
BlackRock’s ties to China have recently come under bipartisan federal scrutiny. The House Select Committee on the Chinese Communist Party announced last week it would launch an investigation into BlackRock alongside index provider MSCI.
Chairman Mike Gallagher (R-WI) and ranking member Raja Krishnamoorthi (D-IL) said in a letter to BlackRock CEO Larry Fink that his firm invests or enables the investment of U.S. savings into Chinese companies blacklisted by the United States.
“Our review has shown that, as a direct result of decisions made by (BlackRock/MSCI), these Americans are now unwittingly funding PRC (People’s Republic of China) companies that develop and build weapons” for the Chinese military, the two wrote.
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In a statement to the Washington Examiner, BlackRock denied any impropriety and said the trustees would respond to the letter.
"BlackRock and its funds’ Boards of Trustees act in full accordance with their fiduciary obligations and in the best interests of all fund shareholders. The Funds’ Independent Trustees intend to respond to the state financial officers’ letter," the statement read.