A letter to the SEC reveals BlackRock’s altars on China and ESG investments
Nineteen US Attorneys General have asked the SEC to investigate BlackRock's ESG investments and its relationship with China. All the details
In the United States, BlackRock, the largest asset management company in the world, has come under scrutiny by a group of state attorneys general due to its strong focus on ESG investments, i.e. those that take into account the impact on the environment. , society and the governance ( environmental, social, governance ) of a certain financial transaction: in this case we speak of “sustainable finance”.
NOT ONLY ESG: ALSO CHINA
Nineteen American Attorneys General, led by Mark Brnovich of Arizona, wrote an eight-page letter to the Securities and Exchange Commission (or SEC: it is the U.S. federal agency that oversees the stock exchange) to further ask it to investigate BlackRock's reports. with China, to assess whether or not the company is prioritizing its fiduciary responsibility to investors.
More specifically, the letter states that BlackRock – led by Larry Fink – invests and does business with Chinese companies that often pay little attention to environmental issues; at the same time, however, the company pressures US companies to adopt policies of net zeroing of greenhouse gas emissions. This was, for example, the message of the letters that Fink sent in 2021 to the business executives and customers of BlackRock.
The attorney general's letter, however, asks the SEC to investigate whether BlackRock's ties to certain climate associations and its ESG goals conflict with its fiduciary responsibilities. "Based on the facts currently available to us," it reads, "BlackRock appears to be using the hard earned money of the citizens of our states to evade the best possible return on investment as well as their vote."
At the end of 2021, Fink had proposed the creation of new financial vehicles dedicated to the unbundling of oil assets, in order to avoid the risk of arbitrage; oil companies will then be able to use the proceeds from sales to invest in clean technologies.
In June, the SEC initiated an investigation into Goldman Sachs' ESG mutual funds to make sure they truly adhered to sustainability principles.
THE CRITICS AT BLACKROCK
"BlackRock's past public commitments," the letter continues, "indicate that it has used citizens' investments to pressure companies to comply with international agreements such as the Paris Agreement, which force the phasing out of fossil fuels. , increase energy prices, push inflation and weaken the national security of the United States ”.
Brnovich, the Arizona attorney general leading the BlackRock protest, has been hostile to climate and energy transition policies for years. Arizona is ruled by Republican Party member Doug Ducey.
– Read also: Why US Republicans and Fink (BlackRock) are at war
POSSIBLE REACTIONS
The New York Post writes that although attorneys general are merely asking for answers on BlackRock's investment policies, treasury authorities in each of the nineteen states could withdraw their respective state pensions from BlackRock's coffers, for example, or ban been to have financial relationships with the company.
Last month, West Virginia treasurer Riley Moore banned five major financial institutions – including BlackRock, but also Goldman Sachs and JPMorgan – from entering into banking deals with state agencies.
POLITICAL REASONS?
The argument behind the letter from Brnovich and the other attorneys general who turned to the SEC is that BlackRock's sustainable finance policies are influenced by some Democrat-led states such as California, New York, Illinois and Connecticut. whose pension funds are managed by the company. "Are the asset managers", the authors of the letter ask, "are they making zero net commitments to market themselves to these investors?".
The Wall Street Journal claims that the "ESG movement" has infiltrated investment standards without much scrutiny for years, and that BlackRock CEO Larry Fink has "led" this trend. The newspaper then writes that former BlackRock executives – such as Brian Deese, now director of the US National Economic Council – are able to influence Joe Biden's administration.
– Read also: ESG funds, greenwashing allegations overwhelm asset managers
THE ATTACK OF SOROS ON BLACKROCK
In a commentary article in the Wall Street Journal , George Soros – Hungarian naturalized US entrepreneur founder of Soros Fund Management – criticized BlackRock's investments in China, calling them "a tragic mistake" that will result in economic losses for the company's clients and " more importantly, it will harm the national security interests of the United States and other democracies ”.
According to Soros, in fact, BlackRock has drawn a line of distinction between private and state-owned companies that does not reflect the actual reality in China, suggesting that the Beijing government may meddle in the company's affairs.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/blackrock-esg-lettera-sec-procuratori-generali/ on Wed, 17 Aug 2022 13:13:45 +0000.