Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Three years after targeting asset managers for environmental policy, Texas removed BlackRock from the blacklist of companies that banned them from receiving state investment funds.
As a decision by state director Glenn Heger, Texas pension and investment funds allow BlackRock stocks to be purchased and invested in the funds by having assets with assets of approximately $300 million. State-run funding is now permitted to rely on a New York-based group for financial advice and risk management guidance.
Earlier this year, BlackRock dropped out of the non-sponsored climate coalition known as Net Zero Asset Managers. It followed the move to a step back from the Climate Action 100+ Group in 2024.
Tuesday’s announcement amounts to a victory for Texas legislators and the oil and gas industry. The oil and gas industry is trying to counter the efforts of asset managers to mitigate climate change through investment allocation.
Heger said: “This is a meaningful victory and examines the leadership Texas has shown on the issue, which shows a monumental change in the way businesses, governments, and individual Americans look at the energy sector.”
BlackRock did not respond immediately to requests for comment.
Asset managers are under attack from states voting Republicans, and there are several passed laws that restrict or restrict work or investment with businesses with certain environmental, social and governance policies.
The company is trapped in a legal battle with the Texas Attorney General, who alleges that BlackRock and some of its biggest rivals have illegally conspired to manipulate the energy market as part of its green energy policy. BlackRock said this week that the lawsuit was “factually or legally meaningless.”
BlackRock CEO Larry Fink was once a supporter of the voices of environmental corporate behavior, warning his top executives in 2020 that “climate risk is an investment risk.”
“All governments, companies and shareholders must stand up to climate change,” he detailed “many initiatives to place sustainability at the heart of their investment approach.”
However, in the next few years, BlackRock became the target of conservative policymakers, sought to limit the way 11.6TN asset managers used their weight in the market to influence corporate behavior.
In 2022, Heger added a small number of financial services companies to the Texas Blacklist, including BNP Paribas and UBS.
BlackRock has been working to distance itself from the ESG movement and repair relationships with these clients. Fink himself says he has stopped using the term “because it has been completely weaponized.”
Hegger said Tuesday: “We weren’t going to punish any of these companies. The companies we included on the list wanted to take steps to ensure that they were eventually removed.”
He added that BlackRock’s decision to limit support for activist investors to minimize fossil fuel use demonstrated “a true commitment to overall policy change and a desire to act as a reliable partner.”