Original Article By Jacob Bliss At Breitbart.com:
Florida Chief Financial Officer Jimmy Patronis announced on Thursday that the state would start to pull $2 billion in assets away from BlackRock due to the state’s opposition to the company’s major push into Environmental, Social, and Governance (ESG) policies.
The CFO’s $2 billion divestment is the most significant anti-ESG divestment to date, as Republican states have started to take a stand against this type of leftist activism in financial investing.
Patronis explained in a press release that the state’s treasury would “immediately have Florida’s custody bank freeze approximately $1.43 billion worth of long-term securities and remove them as the manager of approximately $600 million worth of short-term overnight investments.”
The billions of dollars in funds are invested through asset managers as part of Florida’s Treasury Investment Pool, according to the press release. However, Patronis noted that the state would be completely divested y from BlackRock’s management and relocated to other fund management entities by the beginning of 2023.
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Patronis said in a statement that, as Florida’s chief financial officer, it is his responsibility to get the best return possible for his state’s taxpayers, noting that the “more effective we are in investing dollars to generate a return, the more effective we’ll be in funding priorities like schools, hospitals and roads.”
Acknowledging that the major banking institutions and economists are predicting there will be a recession while the Federal Reserve increases interest rates to combat the inflation crisis, Patronis added, “I need partners within the financial services industry who are as committed to the bottom line as we are – and I don’t trust BlackRock’s ability to deliver.”
Patronis further explained:
BlackRock CEO Larry Fink is on a campaign to change the world. In an open letter to CEOs, he’s championed ‘stakeholder capitalism’ and believes that ‘capitalism has the power to shape society.’ To meet this end, the asset management company has leaned heavily into Environmental, Social, and Governance standards – known as ESG – to help police who should, and who should not gain access to capital.
Whether stakeholder capitalism, or ESG standards, are being pushed by BlackRock for ideological reasons, or to develop social credit ratings, the effect is to avoid dealing with the messiness of democracy. I think it’s undemocratic of major asset managers to use their power to influence societal outcomes. If Larry, or his friends on Wall Street, want to change the world – run for office. Start a non-profit. Donate to the causes you care about.
Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for. It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do. Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns. As Larry Fink stated to CEOs ‘[A]ccess to capital is not a right. It is a privilege.’ As Florida’s CFO I agree wholeheartedly, so we’ll be taking Larry up on his offer. There’s no lack of companies who will invest on our behalf, so the Florida Treasury will be taking its business elsewhere.
As the Sunshine State’s CFO touched on in his statement, ESG policies are a form of leftist activism in financial investing that has become the latest vector to influence the way Wall Street financial firms and corporations continue to take social and political positions that do not relate to their business, such as stances associated with climate change, as well as the Diversity, Equity, and Inclusion (DEI) agenda. Wall Street firms, such as BlackRock and others, sell ESG as a way to invest according to specific criteria that the political left pushes on voters and consumers.
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Notably, the state’s $2 billion may not significantly impact the asset manager, as BlackRock has $8 trillion in assets. However, it still drew significant criticism from the company, claiming the move was politically motivated.
“We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens,” BlackRock said in a statement. “Fiduciaries should always value performance over politics.”
In addition to Florida, state treasurers from Republican-controlled states like Louisiana and Missouri reallocated hundreds of millions of dollars away from BlackRock in October.
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