Larry Fink – Wikipedia
The State of Texas pulled an $8.5 billion investment it had with Larry Fink’s BlackRock investment firm over the organization’s stance on ESG – environmental social governance. Apparently, Texas law prohibits dealing with businesses that take stands against the continued use of fossil fuels, which makes sense since the state’s economy is based on the oil industry.
ESG is a framework used to assess a company’s sustainability and social responsibility. This includes environmental concerns, such as a company’s impact on the planet. Factors like climate change, pollution, resource management, and energy efficiency fall under this category. So, fossil fuels like oil are pushed aside in favor of new types of renewable energy.
Texas State Board of Education Chair Aaron Kinsey released a statement saying, “The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office. “Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.”
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“BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF. Texas and the PSF have worked hard to grow this fund to build Texas’ schools,” he added. “BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.”
“Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street,” Kinsey said Tuesday. “This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.”
Kinsey told Reuters that the Board’s relationship with BlackRock breached state law against investing with companies accused of boycotting energy companies.
“That money originates from the oil and gas industry primarily,” he said. “If there’s no income, no billion dollars a year from oil and gas, that’s a problem for our fund, obviously an existential long-term risk.”
“BlackRock is helping millions of Texans invest and save for retirement,” BlackRock spokesperson told FOX Business in response to all of this. “On behalf of our clients, we’ve invested more than $300 billion in Texas-based companies, infrastructure and municipalities, including $125 billion invested in the energy sector, including a $550 million joint venture with Occidental. We recently hosted an energy summit in Houston designed to explore how to strengthen Texas’ power grid.”
“Today’s unilateral and arbitrary decision by Board of Education Chair Aaron Kinsey jeopardizes Texas schools and the families who have benefited from BlackRock’s consistent long-term outperformance for the Texas Permanent School Fund,” BlackRock added in a statement later Tuesday. “The decision ignores our $120 billion investment in Texas public energy companies and defies expert advice. As a fiduciary, politics should never outweigh performance, especially for taxpayers.”
Larry Fink is an American billionaire businessman best known for being the co-founder, chairman and CEO of BlackRock, a financial services company and the world’s largest asset manager, with over $10 trillion dollars under management.
According to his official bio, Laurence D. Fink is Chairman and Chief Executive Officer of BlackRock. He and seven partners founded BlackRock in 1988, and under his leadership, the firm has grown into a global leader in investment and technology solutions. BlackRock’s mission is to help our clients build better financial futures and the firm is trusted to manage more money than any other investment company in the world.
Prior to founding BlackRock in 1988, Mr. Fink was a member of the Management Committee and a Managing Director of The First Boston Corporation.
Fink is a prominent figure in the world of finance and investment, and his views on the economy and financial markets are widely followed. He is also known for his philanthropy and his involvement in various civic organizations.
