West Virginia State Treasurer Riley Moore announced Monday that his state would end use of a BlackRock Inc. mutual fund over the company’s push into climate-focused investment strategies that Moore says are threatening his state’s economy.
“As the state’s Chief Financial Officer and Chairman of the Board of Treasury Investments, I have a duty to ensure taxpayers’ money is managed in a responsible, financially sound manner that reflects the best interests of our state and our country, and I believe in doing business with.” BlackRock is in breach of that duty,” Moore said in a statement.
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The Treasurer’s press release explained that the decision was made in response to reports that BlackRock “has urged companies to pursue ‘net-zero’ investment strategies that would hurt the coal, oil and natural gas industries, while at the same time investing into Chinese companies that undermine national interests and damage West Virginia’s manufacturing base and labor market.”
Last month, nonprofit educational organization Consumers’ Research sent a letter to 10 governors, including the governor of West Virginia, whose state pension funds are most heavily invested in BlackRock, warning of the money management firm’s heavy investments in China.
“BlackRock’s diversion of billions of U.S. capital into China presents risks not present in other markets, risks that threaten the big bets the company is making on high returns from China,” wrote Will Hild, Executive Director of Consumers Research, in the letter.
“Chinese firms are not subject to the same standards of transparency as their Western counterparts, so foreign investors are often under pressure to assess the true risk profile of what they are investing in,” Hild added.
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A BlackRock spokesman told FOX Business at the time that the U.S. and China “have a vast and closely related economic relationship.”
“We recognize that our stakeholders have different views on China – BlackRock takes these concerns seriously,” the spokesman said. “We are trying to balance the concerns of our stakeholders with our role as a global investor and fiduciary working for our clients as we navigate this very complicated US-China relationship. Our approach to China-related investments is consistent with US foreign policy. “
BlackRock, the world’s largest wealth manager with more than $10 trillion in assets under management, announced in January 2021 that it was committed to supporting the goal of achieving net-zero greenhouse gas emissions by 2050 or sooner. The company makes no secret of its commitment to decarbonization and sustainability.
In 2020, the asset management giant launched a range of climate-focused exchange-traded funds that weed out companies with specific investments in specific energy sectors, like coal and shale oil, that green investors want to avoid.
BlackRock says on its website that its net zero initiative is important because “climate risk will fundamentally transform finance and drive a significant reallocation of capital,” adding that the company believes that “a successful and orderly net -zero transition is in the financial interest”. their customers “and the economy at large”.
BlackRock CEO Larry Fink says the company’s sustainable investment strategies are in high demand. He said on the company’s recent fourth-quarter conference call, “In the last two years alone, we’ve already seen $4 trillion of capital move from traditional investments to sustainable investments, and this is just the beginning.”
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West Virginia is the second largest coal producer in the US and the state ranks fifth in total energy production. About 4.6% of the country’s energy production comes from renewable sources such as hydropower and wind power, according to the country’s Ministry of Economic Development.
BlackRock did not immediately respond to FOX Business’ request for comment on the West Virginia move.