BlackRock has been faraway from Texas’s funding blacklist, a serious reversal that follows the asset administration big’s resolution to cut back a few of its controversial local weather commitments.
The transfer, introduced Tuesday by Texas Comptroller Glenn Hegar, ends a three-year ban that had prevented state pension and funding funds from doing enterprise with the world’s largest asset supervisor over its environmental, social and governance (ESG) insurance policies.
“This marks a meaningful shift,” Hegar mentioned. “Texas has played a leadership role in standing up to financial institutions that try to push political agendas under the guise of environmental concern. We’re seeing a course correction.”
Texas funds maintain an estimated $50 billion in property.
A BlackRock spokesperson instructed The Publish: “We appreciate the Comptroller’s resolution of this matter.”
“More than $4 billion in Texas funds are invested with BlackRock,” the rep mentioned.
The Larry Fink-led firm had $11.55 trillion in property beneath administration on the finish of the fourth quarter in 2024.
We’re “proud to help millions of Texans retire with dignity and, on behalf of clients, invests over $400 billion in corporations, local governments, energy infrastructure and other private assets throughout the state,” the spokesperson mentioned
“These investments support the continued growth of the Texas economy.”
BlackRock had drawn fireplace from Republican-led states like Texas for supporting climate-focused funding methods and for its involvement in initiatives aimed toward decreasing world emissions.
However over the previous yr, the New York Metropolis-based agency has distanced itself from a few of these efforts. In January, it exited the Local weather Motion 100+ investor group.
It additionally withdrew from the Web Zero Asset Managers initiative, a UN-backed coalition centered on decreasing portfolio emissions.
The rollback seems to have helped easy tensions with officers in Texas, the place fossil fuels stay a key pillar of the economic system and political id.
The Texas comptroller’s workplace had added BlackRock and different monetary corporations to its restricted record in 2022 after lawmakers handed laws concentrating on perceived boycotts of the oil and fuel trade.
That regulation required the comptroller to establish corporations that “discriminate” in opposition to fossil gasoline firms and to direct state funds to divest from them.
Since then, the blacklist has change into a flashpoint within the nationwide debate over ESG investing.
Whereas many conservatives have argued that enormous asset managers wield an excessive amount of affect in selling progressive agendas, others — together with some throughout the monetary trade — warned that the restrictions risked limiting returns and politicizing fiduciary decision-making.
BlackRock has repeatedly pushed again on claims that it engages in coordinated efforts to undermine the fossil gasoline sector.
“We never set out to penalize any company,” Hegar mentioned Tuesday, “but we made clear there would be consequences for putting politics ahead of financial performance.”
Regardless of the thaw in relations, BlackRock stays the topic of a separate authorized combat with a coalition of Republican attorneys normal, together with Texas Legal professional Common Ken Paxton, who allege the agency has violated antitrust legal guidelines by way of its ESG commitments.
BlackRock has denied the fees, calling them baseless.
