US Republicans pull $1bn from BlackRock over ESG investing concerns
BlackRock has lost more than $1bn in asset management business in US Republican states upset with the company’s green investing policies, withdrawals that have become a political problem but so far have not dented the company’s revenues.
In an interview with the Financial Times, South Carolina state treasurer Curtis Loftis said he would pull $200mn from BlackRock by the end of the year. Louisiana treasurer John Schroder said last week he is withdrawing $794mn from BlackRock. Utah’s treasurer Marlo Oaks said he liquidated $100mn in BlackRock funds, and Arkansas reportedly pulled $125mn this year.
As the global sustainable investing phenomenon surged — it has increased by $1tn since 2020 — BlackRock jumped into the action. The company manages five of the top 20 US sustainable funds by assets, which is more than any other investment manager, according to Morningstar.
BlackRock declined to comment, but pointed to a letter the company sent in August to state attorneys-general to defend its ESG policies.
The Republicans’ race to cut ties with BlackRock had not affected its underlying business, said Greggory Warren, an analyst at Morningstar. The BlackRock funds the Republicans had dropped were often cash-like products with small fees, he said. The Republicans’ ESG backlash was “political posturing” ahead of elections in November, he added.
US state treasurers typically oversee cash management, bond deals and certain aspects of a state’s retirement funds. Though BlackRock has become the Republican treasurers’ favourite punchbag, other financial companies have been hit as well.
In West Virginia, the treasurer’s office will transfer banking services out of JPMorgan Chase by the end of November, according to a spokesman. West Virginia earlier this year banished JPMorgan, BlackRock and three other banks for allegedly hurting energy companies, the state treasurer said.
This story originally appeared on: Financial Times - Author:Patrick Temple-West
