The Texas state legislature subpoenaed BlackRock for a series of documents related to the billion-dollar financial institution's environmental, social and governance ESG policy push.
The Texas Senate Committee on State Affairs issued the subpoena late last month, which represents the latest effort by the Republican-led state to slow down the so-called ESG movement. Massive asset managers such as BlackRock, Vanguard and State Street have been pushing ESG standards upon companies in which they hold large financial stakes in an effort to push a transition from fossil fuel energy sources to alternative energy sources like wind and solar.
In August, the Texas Senate Committee on State Affairs wrote letters to BlackRock, Vanguard, State Street and Institutional Shareholder Services ISS, a large financial advisory firm, for documents related to their ESG decision-making process. BlackRock did not hand over documents that the committee had asked for, despite Vanguard, State Street and ISS sharing relevant information.
The Committee needs these documents to find out the extent to which these firms have been playing politics with Texans hard-earned money. The committee will hold a hearing next week where each firm will appear and give account to the people of Texas, Texas Republican state senator Bryan Hughes, chairman of the Committee on State Affairs, told FOX Business in a statement. Some of the firms have provided more than others, because of the fact that they have produced documents. BlackRock has refused to provide documents it considers confidential or internal. Hughes said that we have issued a subpoena to BlackRock for the production of additional documents that the committee needs to complete its work. We will not allow these firms to use Texans money to force a narrow political agenda. They have a legal duty to put their investors' interests first, and we intend to make sure they do. Texas lawmakers and the state's comptroller Glenn Hegar have zeroed in on how ESG standards may be harming Texas state pension plans that have relationships with firms in question, including BlackRock. They worry that the ESG push is negatively affecting the state's massive oil and gas industry.
In August, Hegar said that the environmental, social and corporate governance movement has produced an opaque and perverse system in which financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a political agenda that is shrouded in secrecy.
Some of these firms may be using investments owned by Texas to push shareholder initiatives that are not in line with the interests of our state, he said.
In accordance with the recently passed state law, Hegar's office has also published a list of financial institutions that have been involved in boycotts of energy companies. BlackRock was included in the list.
More than a dozen other Republican-led states have fought back against the ESG movement. In October, both Louisiana and Missouri announced that they would divest hundreds of millions of dollars from BlackRock's investment portfolio due to their ESG policies.