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Tina Casey headshot

Why is Texas Still Picking on BlackRock Over Fossil Energy?

Texas has become the epicenter of the U.S. energy transition. Yet policymakers have singled out BlackRock for its commitment to clean power. So, what gives?
By Tina Casey
BlackRock claps back at criticism of fossil fuel investments

Texas has become the epicenter of the U.S. energy transition. Investors are flocking to the state’s thriving clean tech industries including wind, solar, energy storage, electric vehicles and more. Nevertheless, policymakers in Texas and elsewhere have singled out the world's top asset management firm, BlackRock, for negative attention regarding its commitment to clean power. So, what gives?

BlackRock loves sustainable investing…

BlackRock has been front and center in the sustainable investing field, commonly expressed as ESG, a holistic approach that includes environmental, social and governance goals. “Sustainable investing is about investing in progress, and recognizing that companies solving the world’s biggest challenges can be best positioned to grow,” BlackRock explains on its website.

However, BlackRock also states that pursuit of the bottom line remains its core mission. “Through the combination of traditional investment approaches with environmental, social and governance (ESG) insights, investors ranging from global institutions to individuals are taking a sustainable approach to pursuing their investment goals,” the company's website reads.

…and BlackRock loves fossil energy, too

The emphasis on problem-solving also provides BlackRock with room to continue investing in fossil energy, as the company has repeatedly made clear.

As applied to Texas, that clarity of purpose over fossil energy takes on special meaning, as the new state law SB 13 took effect last year.
SB 13 is aimed at stifling the impact of ESG investing on fossil energy companies. It stipulates that public pension plans in Texas cannot invest in, or contract with, firms that boycott fossil energy, as determined by the state comptroller.

After the law went into effect, BlackRock was among the firms scrambling to deny any appearance of a boycott. On Jan. 3, BlackRock senior managing director and head of external affairs, Dalia Blass, wrote a letter to Texas trade organizations and other stakeholders, in which she detailed BlackRock’s many-faceted interests in Texas-based fossil energy companies.

The letter was published in full online by the Texas Independent Producers and Royalty Owners Association, among other organizations.* “For over 30 years, BlackRock has been a significant investor and capital provider to energy companies, including fossil fuel companies, on behalf of our clients. We will continue to invest in and support fossil fuel companies, including Texas fossil fuel companies,” Blass wrote. 

In addition to providing facts and figures on BlackRock’s fossil fuel interests in Texas, Blass also cited statements in support of fossil energy companies by BlackRock founder and CEO Larry Fink.

Why pick on BlackRock?

At the top of her Jan. 3 letter, Blass emphasized that BlackRock is not now, and will not, boycott fossil energy companies. Facts, figures and a clear statement of intent should have been enough, but it wasn’t.

In May, the Austin Journal reported that Texas Comptroller of Public Accounts Glenn Hegar sent a letter to BlackRock and a group of other firms, warning they may be in violation of SB13.

According to the Austin Journal, Hegar included BlackRock in the list of recipients at the request of Texas Lieutenant Gov. Dan Patrick. In an interesting twist, Patrick reportedly held investments in BlackRock but sold them in January of this year, as he prepared to run for re-election to a third term.

Hegar reportedly narrowed that group down to 10 firms by mid-August. By the end of the month he determined that none of the firms were in violation of SB 13 — except for BlackRock.

BlackRock to 19 Republican attorneys general: Why me?

Hegar and Patrick were not the only Texas officials to single out BlackRock for special treatment. 

Texas Attorney General Ken Paxton also signed on to an August 4 group letter addressed to BlackRock. The letter was organized by Arizona Attorney General Mark Brnovich and signed by 17 other Republican state attorneys general in addition to Paxton and Brnovich. In a press release dated August 4, Brnovich lauded the letter for “calling out” BlackRock’s “practices of putting leftist politics above investors’ interests and returns.”

Paxton also called attention to the letter in a press release dated August 8. The letter itself does not mention “leftist politics” in so many words, but it does define BlackRock within the framework of a global elite that controls policy regardless of the will of elected representatives.

The letter includes multiple references to BlackRock’s support for global action including the 2015 Paris Agreement on climate change, the Net Zero Asset Managers Alliance, Climate Action 100+ and GFANZ (the Glasgow Financial Alliance for Net Zero). “BlackRock joined groups so focused on promoting the Paris Agreement that they want to stifle opposing viewpoints altogether,” the letter states, adding that “quelching political speech is the action of an activist whose mind is made up.”

“Whether mixed motives arise from a desire to save the world or attract investment from European or left-leaning pension funds, is ultimately irrelevant to the legal violation,” the letter continues.

Antisemitism rears its ugly head

Whether intentional or not, the singular attention to BlackRock evokes antisemitic conspiracy theories alleging the existence of a shadowy, undemocratic global elite that controls world finances.

After all, BlackRock CEO Larry Fink is a well-known Jewish financier who heads a company with far-reaching interests. Somewhat ironically, environmental activists who identify as Jewish have protested BlackRock’s fossil energy investments, on account of an alleged conflict with the tenets of Judaism. However, that has not swayed elected officials in Texas and other states, who have continued to single out BlackRock for attention despite concrete evidence that the company has not engaged in a fossil energy boycott.

On its part, BlackRock appears to be gearing up for the next stage of a long, ugly fight.

The news organization Pensions & Investments was among those posting excerpts from a new letter last week, sent by Dalia Blass of BlackRock to Ken Paxton and the 18 other attorneys general who signed the August 4 letter. Blass sought to dismantle claims of an extra-governmental movement, writing that “governments representing over 90 percent of global GDP have committed to move to net-zero in the coming decades.”

"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,” she continued.

"Given our commitment to those saving for retirement, 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,” she emphasized, taking note of BlackRock’s widespread involvement in ventures involving natural gas as well as renewables and decarbonization.

“Such a significant investment in, and cooperation with, energy industry companies, ranging from international corporations to entities dedicated to serving local communities in your states, is completely at odds with any notion of a boycott," she concluded.

The ball is now apparently back in the court of Hegar, Patrick and Paxton, as well as the other attorneys general who signed the August 4 letter. Their motive in singling out the Jewish CEO of BlackRock for attention may become more clear as the 2022 midterm elections loom closer and campaign rhetoric heats up to the boiling point.

*Editor's note: The January letter from Blass was posted online with the date of Jan. 3, 2021. However, that appears to be a typo on Blass's end. Several websites that posted the letter did so in January 2022, not 2021. Reuters and other media organizations also reported the letter as written in January 2022. In addition, the letter includes multiple footnotes dated in the later months of 2021.

Image credit: Jim Henderson via Wikimedia Commons

Tina Casey headshot

Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.

Read more stories by Tina Casey