The state of Florida said on Thursday that it has begun selling $2 billion in funds managed by BlackRock, a scathing indictment of the asset manager’s “woke capitalism” investment strategies under CEO Larry Fink.
The withdrawal under Gov. Ron DeSantis – the largest of its sort by a single state – is the most recent indication of rising disquiet among Republican politicians about so-called “ESG” policies, or environmental, social, and corporate governance.
Jimmy Patronis, the chief financial officer of Florida, accused BlackRock of seeking to “affect social results by utilizing their authority.”
Florida never authorized the use of its funds to support BlackRock’s social-engineering initiative, as stated by Patronis. It has nothing to do with optimizing returns and goes against what asset managers are hired to accomplish.
Republicans are assaulting BlackRock.
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“Florida’s Treasury Division is divesting from BlackRock because the company has openly declared it has other objectives than creating returns,” he continued.
The Florida state treasury has dismissed BlackRock as manager of around $600 million in short-term investments and froze approximately $1.43 billion in long-term securities held by its custodian bank. Reuters was the first to report on the decision.
Florida joined other Republican-led states, such as Louisiana and Missouri, in removing state assets from BlackRock’s management due to ESG-related concerns.
Larry Fink of BlackRock has championed “stakeholder capitalism.”
The Post has requested comment from BlackRock.
In August, DeSantis, a frequent opponent of so-called “woke” firms, said that state pension funds may no longer take ESG principles into account when investing for pensioners.
The three-member Florida state Board of Administration, led by DeSantis, issued a resolution directing fund managers to use public resources in a manner that “prioritizes the maximum return on investment” while ignoring the “ideological agenda” of ESG.
DeSantis stated at the time, “Corporate power has been increasingly used to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity.”
Fink’s outspoken advocacy of “stakeholder capitalism” as an investing strategy has attracted the attention of Republican legislators.
In a January 2016 open letter to investors, the CEO of BlackRock asserted that stakeholder capitalism is “not about politics.”
Previously, Florida prohibited the use of ESG principles to direct state pension investments.
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“It is neither a social nor an ideological objective. It is not enlightened,” Fink stated in his letter. “It is capitalism, which is driven by mutually beneficial connections between you and the employees, customers, suppliers, and communities upon whom the success of your business depends. Such is the might of capitalism.”
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