Financial officers representing 21 red states said Tuesday that if investment firms want to conduct business with their states, they need to confirm that their decisions are based on fiduciary integrity, not woke ideology.
The letter from 26 Republican state financial officers to 18 investment firms, including BlackRock, Vanguard Group, Fidelity Investments and JP Morgan Chase, asked them to affirm that they no longer rely on factors such as environmental, social and governance pledges, known as ESG investing.
“While some firms have recently taken encouraging steps, such as withdrawing from global climate coalitions and scaling back ESG rhetoric and proxy votes, and some states have permitted incremental reintegration, more work must be done,” the letter said. “The number one issue is a recommitment to the foundational principles of fiduciary duty, loyalty, objectivity, and financial focus.”
The letter asked the companies to take five actions to demonstrate their “commitment to a fiduciary model grounded in financial integrity, not political advocacy.”
They include commitments to stop relying on climate-change models, international political resolutions, and passive-investment vehicles for “activist proxy voting.”
“Financial institutions wishing to compete for our states’ business should provide durable assurances that their practices align with these principles,” the letter said.
The state officials were spurred by Texas Comptroller Glenn Hegar’s decision last month to remove BlackRock from its blacklist of firms that “boycott” the oil-and-gas industry after nearly three years.
A 2021 Texas law prohibits the state from investing with firms that “boycott energy companies” through antagonistic policies.
Pushing back on the delisting move were Consumers’ Research and the American Energy Institute, which released a report earlier this month arguing that BlackRock continues to oppose fossil-fuel production through levers such as proxy-voting guidelines that push net-zero emissions targets.
Will Hild, executive director of Consumers’ Research, said that “BlackRock is playing a game of deceit” by “trying to say all the right things to conservatives while quietly doubling down on their activist agenda behind the scenes.”
“As we’ve continued to point out, BlackRock has no intention of putting fiduciary duty over politics,” he said in a Tuesday statement. “Consumers’ Research applauds the state financial officers who are holding BlackRock and other major financial institutions accountable.”
In a June 3 statement, Mr. Hegar said that “BlackRock has stepped back from full participation in the Climate Action 100+ and completely exited the Net Zero Asset Managers initiative,” as well as “dramatically reduced the number of fund offerings that prohibit investment in oil and gas.”
“The firm also has acknowledged the real social and economic costs, both in Texas and globally, that come from limiting investment in the oil and gas industry,” said Mr. Hegar. “In short, it is engaging in a more intellectually honest conversation.”
O.J. Oleka, CEO of the State Financial Officers Foundation, praised the 21 state financial officers, saying they are “doing the right thing for their states and the taxpayers whose financial security they’ve been entrusted to protect.”
“Actions always speak louder than words,” said Mr. Oleka in a statement. “Requiring America’s financial giants to prove their independence from woke ideology with concrete steps before doing business with a state’s dollars is fully necessary and just makes sense.”
The states represented by the Tuesday letter are Alabama, Alaska, Arizona, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Utah, West Virginia and Wyoming.
• Valerie Richardson can be reached at vrichardson@washingtontimes.com.