One of the world’s largest investment companies has countered claims by the Republican attorneys general of 19 fossil fuel-dependent states, including Indiana, that it breached fiduciary responsibilities by engaging in “woke” investing that discriminates against fossil fuels.
The attorneys general sent BlackRock Inc. a letter in early August claiming the company’s use of non-financial considerations in investing, known as environmental, social and governance considerations, or ESG, resulted in the use of citizens’ assets to pressure companies into abandoning fossil fuels, thereby increasing energy prices, driving inflation and weakening U.S. national security.
In a letter to the attorneys general, BlackRock senior managing director Dalia Blass said the company did not boycott energy companies in its investments and instead invested hundreds of millions of dollars in a “diverse mix of energy sources” including some fossil fuel assets.
Blass said its investment decisions reflect the “best long-term financial results consistent with each client’s investment guidelines.”
“Governments representing over 90% 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. These opportunities cut across the political spectrum; notably, as Bloomberg recently reported, Republican districts are well ahead of their Democratic counterparts in advancing clean-energy projects and deploying clean-energy technology,” Blass wrote.
Indiana attorney general Todd Rokita recently wrote an advisory opinion saying investments made by the Indiana Public Retirement System Board of Trustees could not be made with ESG considerations in mind.
The Indiana Bankers Association, which represents banking institutions in the state, said restricting investments or state commerce based on ESG statements was a flawed policy that hurt the state’s financial institutions, which rely on diverse investment options.
Rokita’s opinion follows a failed attempt by Rep. Ethan Manning to push through a bill during the 2022 legislative session that prohibited the state from investing in or entering into contracts with companies that “boycott” fossil fuels or were perceived to do so. The Indiana Bankers Association called it an “anti-free market bill.”