BlackRock warned by US state over ESG investments
Make us a preferred source
Make us a preferred source on Google
The news: Investment firm BlackRock has been issued a legal warning by the US state of Mississippi over "false and misleading statements” related to its environmental, social and governance (ESG) investment strategies.
The numbers: The Republican-ruled state issued BlackRock a "cease and desist order" and warned it could impose a multimillion-dollar administrative penalty on the New York-based money manager.
The context: Mississippi has claimed that all of BlackRock’s fund offerings are ESG funds, including those that explicitly say they are not. The state’s order argued that BlackRock has committed to managing all its assets towards net zero, contradicting the marketing materials for its index funds and that the investment manager still votes its shares on those indexes in a manner informed by ESG considerations.
The world's largest asset manager has faced increasing scrutiny in some Republican-run states over its ESG policies, Reuters reported. Mississippi's legal warning comes after Florida, Louisiana and Missouri have previously said they plan to pull investment mandates from the company, citing concerns that include impact on investor returns due to BlackRock's ESG efforts.
CEO Larry Fink said last year Blackrock lost around USD4 billion ($6.13 billion) in assets under management as a result of the political backlash.
The sources: Reuters, State of Mississippi
