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Texas Schools Fund Announces Move To Yank $8.5 Billion From BlackRock

In yet another loss for BlackRock, the Texas Permanent School Fund, or PSF, announced that it would terminate a massive $8.5 billion investment with the asset manager over its support of environmental, social, and governance (ESG) proposals and policies. The move was announced by State Board of Education Chairman Aaron Kinsey.

As background, Texas, a major oil producer and highly conservative state, passed legislation in 2021 that prohibits government entities from investing in or through “companies like BlackRock that boycott energy companies.” Boycotting energy companies can be one aspect of an ESG agenda. Thus, PSF found its investment with BlackRock was not in compliance with that law.

Announcing the withdrawal of the funds from BlackRock in a statement, Chairman Kinsey wrote, in his statement, “The Texas Permanent School Fund (PSF) 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.”

Continuing, Kinsey noted that terminating the relationship with BlackRock was necessary to ensure PSF is in compliance with Texas law, saying, “Today, PSF leadership delivered an official notice to global asset manager BlackRock terminating its financial management of approximately $8.5 billion in Texas’ assets. Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law.

Explaining what law could be violated if PSF maintained its relationship with ESG-promoting BlackRock, Kinsey noted, “The PSF’s relationship with BlackRock was not in compliance with Texas Government Code Section 809, commonly referred to as Senate Bill 13, which prohibits state investment in companies like BlackRock that boycott energy companies.

Then, explaining why BlackRock’s behavior is so problematic for Texans and needs to be taken seriously, Kinsey noted, “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. BlackRock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.

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Emphasizing that the decision comes as part of a front of action to fight for the state’s independence from Wall Street, Kinsey concluded by saying, “Today represents a major step forward for the Texas PSF and our state as a whole. The PSE will not stand idle as our financial future is attacked by Wall Street. This bold action helps ensure our PS remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.

Former GOP presidential candidate Vivek Ramaswamy praised PSF for divesting from BlackRock in a video posted to X. Watch him here:

In his tweet on the matter, Vivek noted, “It’s unconscionable that BlackRock & State Street used ordinary investor money in recent years to vote for “Scope 3 emissions caps” at Chevron and “racial equity audits” at Apple. Kudos to Texas Permanent School Fund for just pulling billions from BlackRock.

BlackRock responded in a statement in which it claimed to be “helping millions of Texans invest and save for retirement.” It added, “On behalf of our clients, we’ve invested more than $300 billion in Texas-based companies, infrastructure and municipalities, including $125 billion invested in the energy sector, including a $550 million joint venture with Occidental. We recently hosted an energy summit in Houston designed to explore how to strengthen Texas’ power grid.”

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