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Wall Street hits back at GOP in ESG war
Wall Street giants are defending a widespread initiative to invest in companies with environmentally friendly policies, moving away from investment in the fossil fuel industry following attacks on the practice from GOP leaders.
Asset management giant BlackRock wrote a letter to GOP states that are trying to curtail a social movement in the financial sector known as Environmental and Social Corporate Governance (ESG), which seeks to move the U.S. economy away from the fossil fuels that contribute to global temperature rise.
Nineteen attorneys general, from mostly Republican-led states, penned a letter to BlackRock in August inquiring about its investment practices.
The attorneys general said BlackRock is pursuing a political agenda instead of investing solely for the purpose of getting the best return on the company’s investments.
“Rather than being a spectator betting on the game, Blackrock appears to have put on a quarterback jersey and actively taken the field,” they wrote. “Blackrock took voting action against 53 companies on climate issues, with 191 companies put on watch.”
“While couched in language about long-term value, Blackrock’s alignment of engagement priorities with environmental and social goals … suggests at minimum a mixed motive,” they wrote.
The firm responded that it favors companies that support the transition away from fossil fuels not because it’s pursuing a political agenda, but because these companies are a better long-term investment.
“We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes,” BlackRock said in a letter addressed to the attorneys general.
The company said that the attorneys general were wrong about why BlackRock was participating in various ESG initiatives.
“In managing our clients’ assets, BlackRock seeks to realize the best long-term financial results consistent with each client’s investment guidelines,” the company said.
The Hill has reached out to the Arizona attorney general for comment on BlackRock’s response.
The Texas state Senate also sent BlackRock a letter in August requesting documents about its ESG practices, which many in the state view as harmful to its economy. About a third of Texas GDP comes from the oil and gas sector.
BlackRock CEO Larry Fink hasn’t shied away from the sociological side of the debate, and has argued repeatedly that capitalism has the ability to shape societies.
BlackRock aside, other voices in corporate America are expressing anxiety about the ire the strategy has drawn from state governments.
“How will these legislative trends affect the difficult corporate balancing act?” Cydney Posner, a lawyer in the public companies group of the law firm Cooley LLP, wrote in a Thursday blog post for the Harvard Law School Forum on Corporate Governance.
“As if it weren’t hard enough for companies to figure out whether and how to respond to social crises, now, another potent ingredient has been stirred into the mix: the actions of state and local governments — wielding the levers of government — to enact legislation or take executive action that targets companies that express public positions on sociopolitical issues or conduct their businesses in a manner disfavored by the government in power,” she wrote.
thehill.com
Wall Street giants are defending a widespread initiative to invest in companies with environmentally friendly policies, moving away from investment in the fossil fuel industry following attacks on the practice from GOP leaders.
Asset management giant BlackRock wrote a letter to GOP states that are trying to curtail a social movement in the financial sector known as Environmental and Social Corporate Governance (ESG), which seeks to move the U.S. economy away from the fossil fuels that contribute to global temperature rise.
Nineteen attorneys general, from mostly Republican-led states, penned a letter to BlackRock in August inquiring about its investment practices.
The attorneys general said BlackRock is pursuing a political agenda instead of investing solely for the purpose of getting the best return on the company’s investments.
“Rather than being a spectator betting on the game, Blackrock appears to have put on a quarterback jersey and actively taken the field,” they wrote. “Blackrock took voting action against 53 companies on climate issues, with 191 companies put on watch.”
“While couched in language about long-term value, Blackrock’s alignment of engagement priorities with environmental and social goals … suggests at minimum a mixed motive,” they wrote.
The firm responded that it favors companies that support the transition away from fossil fuels not because it’s pursuing a political agenda, but because these companies are a better long-term investment.
“We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes,” BlackRock said in a letter addressed to the attorneys general.
The company said that the attorneys general were wrong about why BlackRock was participating in various ESG initiatives.
“In managing our clients’ assets, BlackRock seeks to realize the best long-term financial results consistent with each client’s investment guidelines,” the company said.
The Hill has reached out to the Arizona attorney general for comment on BlackRock’s response.
The Texas state Senate also sent BlackRock a letter in August requesting documents about its ESG practices, which many in the state view as harmful to its economy. About a third of Texas GDP comes from the oil and gas sector.
BlackRock CEO Larry Fink hasn’t shied away from the sociological side of the debate, and has argued repeatedly that capitalism has the ability to shape societies.
BlackRock aside, other voices in corporate America are expressing anxiety about the ire the strategy has drawn from state governments.
“How will these legislative trends affect the difficult corporate balancing act?” Cydney Posner, a lawyer in the public companies group of the law firm Cooley LLP, wrote in a Thursday blog post for the Harvard Law School Forum on Corporate Governance.
“As if it weren’t hard enough for companies to figure out whether and how to respond to social crises, now, another potent ingredient has been stirred into the mix: the actions of state and local governments — wielding the levers of government — to enact legislation or take executive action that targets companies that express public positions on sociopolitical issues or conduct their businesses in a manner disfavored by the government in power,” she wrote.
Wall Street hits back at GOP in ESG war
Wall Street giants are defending a widespread initiative to invest in companies with environmentally friendly policies, moving away from investment in the fossil fuel industry following attacks on …
thehill.com
If the dems keep the house and get a usable majority in the senate, ole Joe will gonna rock and roll, the MAGATs will run, with the FBI in hot pursuit!
