Texas divests $8.5B from BlackRock, citing asset manager’s ESG policies (NYSE:BLK)
David Tran/iStock Editorial via Getty Images
The State of Texas decided on Tuesday to divest $8.5B from BlackRock (NYSE:BLK) amid concerns about the asset manager’s fossil fuel policies.
Aaron Kinsey, Republican chairman of Texas State Board of Education, said the $53B Texas Permanent School Fund has delivered an official notice to BlackRock (BLK) “terminating its financial management of approximately $8.5B in Texas’ assets,” he said in a post on social media platform X.
The move was made in order to comply with a law from 2021 that limits investments in companies participating in so-called boycotts of the oil and gas sector.
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,” Kinsey said. “Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.”
BlackRock (BLK) condemned the fund’s decision to divest, saying it would financially jeopardize schools in the state. “Politics should never outweigh performance especially for taxpayers,” it added on X.
In recent years, Republicans have terminated their financial ties to BlackRock (BLK) on the view that its Environmental, Social and Corporate Governance (“ESG”) investingpolicies bode poorly for the fossil fuel industry. In 2022, the Financial Times reported that state treasurers had divested a total of more than $1B from BlackRock (BLK) funds.
