Texas education fund pulls $8.5 billion from BlackRock (2024)
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The Texas Permanent School Fund (PSF) last week pulled roughly $8.5 billion from BlackRock’s asset management. Texas State Board of Education Chairman Aaron Kinsey (R) argued that BlackRock supports ESG and is ineligible to manage public funds under a state law prohibiting public contracts with companies that illegally boycott the fossil fuel industry:
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'The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office,' Kinsey said in a statement Tuesday. 'Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.' 'BlackRock’s dominant and persistent leadership in the ESG movement immeasurably damages our state’s oil & gas economy and the very companies that generate revenues for our PSF. Texas and the PSF have worked hard to grow this fund to build Texas’ schools,' he continued. 'BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.' … 'Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street,' Kinsey said Tuesday. 'This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.'[1] |
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BlackRock responded with a thread on Twitter/X and a letter to Chairman Kinsey and the TPSF, arguing the move was not in the best interest of the school fund:
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We were dismayed by your announcement to terminate BlackRock's management of approximately $8.5 billion of Texas Permanent School Fund assets. Your actions put short-term politics over your long-term fiduciary responsibilities. We urge you to reconsider your decision and prioritize Texas schools and families who have benefited from BlackRock's consistent, long-term investment outperformance. In announcing your decision, you said, 'The Texas Permanent School Fund (PSF) has a fiduciary duty to protect Texas schools.' BlackRock has been a trusted partner to Texas PSF in fulfilling this duty for nearly two decades - delivering consistently strong performance for Texas PSF over that time. … We fully comply with Texas law and fundamentally disagree with your assessment based on BlackRock’s performance for Texas PSF and our investments in Texas energy companies. Additionally, Senate Bill 13 makes clear divestment is not required when a government entity determines divestment is inconsistent with its fiduciary responsibilities. The outperformance BlackRock has demonstrated shows divestment would not be in the best interest of Texas PSF.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
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