Facing Texas pushback, BlackRock says it backs fossil fuels -Breaking
© Reuters. FILE PHOTO – Lease Operator Jeremy Jay passes through an oil production plant owned by Parsley Energy, in the Permian basin near Midland Texas U.S.A August 23, 2018. REUTERS/Nick Oxford/File photo
By Ross Kerber
BOSTON (Reuters), – BlackRock Inc. (NYSE:) is announcing that, despite the possibility of Texas’ pension funds being dropped, it will continue to promote the message that BlackRock Inc. (NYSE:) is a friend for the oil and gas sectors.
BlackRock is a long-term and large investor in fossil fuel companies and “we want these companies to succeed and prosper”, BlackRock executives stated in a letter to Texas officials and trade organizations.
Dalia Blass from BlackRock, head of external affairs and Mark McCombe chief client officer, both signed the memo. It stated that they would continue to support and invest in fossil fuel companies.
The message remains consistent with other messages, but the focus is fresh after BlackRock’s years-long efforts to address climate change, other environmental, socio and governance issues (ESG), in proxy voting and investment decisions.
BlackRock must balance its portfolio with other pension funds, endowments and companies that are attempting to get rid of fossil fuel stocks. This is due in part to the company’s size and climate-change worries. BlackRock declined to join the ranks of its competitors.
A new U.S. Securities regulator has developed a rule regarding corporate climate change disclosures.
Texas’ new law requires Glenn Hegar (the state’s comptroller) to create a list, which will include financial companies who oppose the use of fossil fuels. The state could ban these firms from its $197 million Teacher Retirement System of Texas. This fund has $2.5billion with BlackRock.
Hegar spokesmen, a Republican spokesperson, told me via email that his organization is currently working to find suitable candidates for the list.
BlackRock wrote in its letter that it “did not and would not” boycott energy companies and pointed to holdings in Texas-based businesses like Exxon Mobil Corp (NYSE :), ConocoPhillips(NYSE 🙂 Kinder Morgan Inc (NYSE:).
Texas Lt. Republican Governor Dan Patrick has asked Hegar to place BlackRock on the first list. He cited BlackRock’s support for “net zero” targets to help companies reduce their emissions, among others. Patrick, a Republican, wrote that this amounts to a boycott of BlackRock under Texas’s new law. He also invoked environmental standards other than federal or state laws in his Jan. 19 letter.
Vanguard Group, and many other leading asset managers are also available. State Street Corporation (NYSE:) has joined similar initiatives such as the Net Zero Asset Managers initiative.
Patrick’s office didn’t respond to our questions.
Alex Epstein (author of a book supporting the use fossil fuels) made BlackRock’s first letter public on Twitter (NYSE.
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