ESG standards would lead to the ‘crippling of our own economy,’ Louisiana Treasurer John Schroder wrote
Louisiana informed mega bank BlackRock on Wednesday that it will divest from the firm’s investment portfolio over its anti-fossil fuel policies.
Louisiana Treasurer John Schroder penned a letter to BlackRock CEO Larry Fink, explaining the state would liquidate all BlackRock investments within three months and, over a period of time, divest nearly $800 million from the bank’s money market funds, mutual funds or exchange-traded funds. The state treasurer blasted Fink’s pursuit of so-called environmental, social and governance (ESG) standards that promote green energy over traditional fossil fuels.
“Your blatantly anti-fossil fuel policies would destroy Louisiana’s economy,” Schroder wrote to Fink in the letter first obtained by FOX Business.
“This divestment is necessary to protect Louisiana from actions and policies that would actively seek to hamstring our fossil fuel sector. In my opinion, your support of ESG investing is inconsistent with the best economic interests and values of Louisiana,” he continued. “I cannot support an institution that would deny our state the benefit of one of its most robust assets.”
Louisiana Treasurer John Schroder gives an on-camera address on March 25. (Louisiana Treasurer John Schroder/YouTube)
“Simply put, we cannot be party to the crippling of our own economy.”
Schroder added that he refused to spend a penny of state funds with a firm that will “take food off tables, money out of pockets and jobs away from hardworking Louisianans.”
Including offshore production, Louisiana drills the second-most oil and third-most natural gas in the nation, according to the Energy Information Administration. The energy industry is the state’s largest sector, accounting for 8.1% of Louisana’s total gross domestic product.
The treasurer noted in the letter that the state has already removed $560 million from BlackRock investments, a figure that will swell to $794 million by year’s end under his agency’s plan.
BlackRock and several other major financial institutions have spearheaded an effort to promote ESG standards over the last several years. A chief pillar of the ESG movement is to utilize publicly-traded funds to incentivize a “net-zero” transition from fossil fuels to clean energy alternatives like wind and solar.
BlackRock CEO Larry Fink speaks during a Bloomberg event at the World Economic Forum on Jan. 21, 2020. (Simon Dawson/Bloomberg via Getty Images / Getty Images)
But the firms have recently faced increased pressure from Republican-led states and groups like the State Financial Officers Foundation which have criticized ESG policies as anti-democratic and, in some cases, illegal.
“Consumers’ Research applauds Treasurer Schroder’s commendable decision to withdraw the state’s assets from BlackRock’s misuse,” Will Hild, the executive director of Consumer’s Research, told FOX Business in a statement. “As noted in his letter, BlackRock is using the people of Louisiana’s money to advance a destructive agenda that raises costs for consumers in the state and across the country.”
“The seeds of today’s energy crisis were planted by BlackRock and others in their reckless abandonment of their fiduciary duty to cozy up to radical, woke politicians,” he continued. “We are glad to see the Treasurer working to put an end to their economic vandalism.”
In late July, West Virginia became the first state to punish banks that pursue ESG standards. Several other states including Louisiana, Texas, Kentucky, Oklahoma, Florida, South Carolina, Arizona, Idaho, Utah, Wyoming, Arkansas and North Dakota told FOX Business at the time that they were prepared to take similar actions.
BlackRock declined to comment on Schroder’s letter, but pointed FOX Business back to a letter it sent to 19 Republican attorneys general in September.
“We are disturbed by the emerging trend of political initiatives that sacrifice pension plans’ access to high-quality investments – and thereby jeopardize pensioners’ financial returns,” the firm wrote to the state officials on Sept. 7.