BlackRock Ends Standoff With Texas Over ESG Policies

Watch BlackRock Ends Standoff With Texas Over ESG Policies - Bloomberg on Dailymotion

Transcript

00:00What do we know, Danielle? Well, today BlackRock has been removed from Texas's blacklist of

00:05companies that they deem to boycott the fossil fuel industry. So this all stems back to a 2021

00:11law that was passed in the state that made Texas review all of these financial firms and their ESG

00:17policies. So what came out of it was there was a list that was put in place and that had certain

00:22investment restrictions for state entities like pension funds or the permanent school fund in

00:27Texas. And BlackRock was on the list. It was put on the list in August of 2022. And it's remained on

00:34there until today when Texas took it off. So you have to imagine that BlackRock CEO Larry Fink is

00:41feeling pretty good right now because he's really been on a charm offensive in the state. Yes, there

00:46has been a lot of movement in Texas. They were removed from the list because they rolled back

00:51some of the ESG policies that got them there to begin with. So they have pulled out of the net zero

00:56asset managers initiative. They stepped back from the climate 100 plus program. And Larry Fink has

01:02made a real effort to engage with Texas officials. He stood on stage with the lieutenant governor last

01:08year and held a summit about Texas's energy grid. And BlackRock has been making moves in Texas to show

01:15its support. And while the controller who maintains this list said that that is unrelated to its listing

01:21decision, it shows BlackRock support for Texas. Yeah, I don't buy that. But I am curious just about this

01:27idea of sort of whether Texas really had any choice in this matter. When we sort of got into this battle,

01:32not only with BlackRock, but with JP Morgan and a few other things, not just on ESG, but on DEI and a few

01:37other policies, there was always this idea here, too, that you kind of need these big institutional firms

01:42because, well, that's where all of the market activity is. And if you're blocking your pensioners

01:48out of this, you're basically blocking them out of return, out of yield that every other state in

01:54America is getting. That's very true. And there's this big back and forth between what they can

02:00actually do. And there is carve outs in this law specifically that said if if pensioners were going

02:04to be hurt by this, the Texas firms or Texas entities wouldn't have to divest. But this is also a real

02:10win for BlackRock because they've been in this sort of back and forth with Texas. And this allows them

02:17to say, we're good. They cleared us. And now that the Texas entities can invest with them without

02:23restrictions. Yeah.