In conservatives' ongoing — and largely successful — work to gut woke ESG (environmental, social and governance) policies in order to protect investors' financial wellness, more than one dozen state attorneys general have put BlackRock on notice by challenging its ability to snap up stock in public utility companies.
BlackRock's blanket authorization to buy large stakes in public utility companies — granted by the Federal Energy Regulatory Commission (FERC) — is worrisome given BlackRock's touted membership in Climate Action 100+ and Net Zero Asset Managers Initiative.
The former means that BlackRock has pledged to "work with the companies in which we invest to ensure that they are minimizing and disclosing the risks and maximizing the opportunities presented by climate change." That is, using shareholder power to achieve radical climate goals that undercuts profits and ROI and ultimately drives up the cost of energy.
The latter is similar. As a signatory to the NZAM, BlackRock has agreed to "acknowledge that there is an urgent need to accelerate the transition towards global net zero emissions and for asset managers to play our part to help deliver the goals of the Paris Agreement and ensure a just transition" and "support the goal of net zero greenhouse gas ('GHG' emissions by 2050, in line with global efforts to limit warming to 1.5°C." It's a literally impossible goal that has no chance of being reached in the prescribed timeline, yet BlackRock has agreed to make climate one of its ESG priorities that will mean reduced returns for investors and general economic damage. Even the Harvard Business Review noted how "ESG funds certainly perform poorly in financial terms."
So, on Wednesday, Indiana Attorney General Todd Rokita led Attorneys General Steve Marshall (Alabama), Treg Taylor (Alaska), Tim Griffin (Arkansas), Brenna Bird (Iowa), Daniel Cameron (Kentucky), Jeff Landry (Louisiana), Lynn Fitch (Mississippi), Andrew Bailey (Missouri), Austin Knudsen (Montana), Mike Hilgers (Nebraska), Dave Yost (Ohio), Alan Wilson (South Carolina), Marty Jackley (South Dakota), Ken Paxton (Texas), Sean Reyes (Utah), Patrick Morrisey (West Virginia) in filing a motion with FERC to challenge BlackRock's ability to snap up large stakes in public utility companies.
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"This is yet another example of radical leftists trying to circumvent the will of the American people in order to implement their draconian mandates," remarked Attorney General Rokita. "The restrictions these elitists are trying to impose on energy companies and utilities would never win approval at the ballot box," he noted. "The public interest is served when investment companies build their business models on maximizing financial returns for clients," Rokita reminded. "Conversely, the public interest is hijacked when these companies subjugate clients’ financial interests to leftist fever dreams."
Those fever dreams enumerated in the Climate Action 100+ and NZAM agreements, Rokita's office noted, mean that American utility companies would be forced "to reduce their fossil fuel usage from 61% in 2020 to 25% by 2030 and 2% by 2050." It's just not going to happen without destroying America's energy sector even more than the Biden administration already has.
The AGs filing to intervene asked FERC to ensure that BlackRock "abstains from imposing" ESG priorities on the energy companies in its holdings. Otherwise, the filing argues, "BlackRock should not receive advance 'blanket authorizations' from FERC to acquire more than $10 million in voting securities in utility companies."
BlackRock has repeatedly succeeded in gaining reauthorization from FERC for such acquisitions by claiming to be a "passive" and "non-controlling investor" in utility companies and saying it did not have any "control over the day-to-day management or operations." But the attorneys general aren't buying that, given BlackRock's membership in the woke ESG climate pacts. "Maybe BlackRock was a passive investor ten years ago, but today it's an environmental activist," the motion from state attorneys general argues.
Will Hild, the executive director of Consumers' Research and a leader in the anti-ESG, pro-investor movement, remarked on Wednesday that it's "great to see state attorneys general taking steps to protect American energy consumers from Wall Street’s reckless interference."
"Large firms like BlackRock pretend to 'passively' manage their shares while using those assets to bully utility companies into adopting radical left-wing policies—policies which make our energy grid more expensive and more unreliable," Hild explained. "Affordable, reliable energy production is the cornerstone of our economy, and Americans’ quality of life depends on energy access," he reminded. "FERC must protect these utilities from blatant and reckless interference by BlackRock and others like it."
Previously, as Townhall reported, a group of 13 state attorneys general filed a similar motion with FERC against Vanguard, another ESG-pushing asset manager, in November 2022. By December, the second-largest asset management firm announced it had defected from the Net Zero Asset Managers Initiative in what became a very bad day for the ESG crowd.
Time will tell whether Wednesday's filing will have the same speedy success in getting BlackRock to withdraw from NZAM, but it's another step building on the momentum of other victories against ESG-pushing firms. There's a reason you see BlackRock advertisements on Fox News regularly, and it's because they know they're facing stiff headwinds as Americans come to know and oppose BlackRock's ESG priorities.
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