Mississippi Accuses BlackRock of Misleading Investors on ESG Agenda and Demands Immediate Action

Mississippi Accuses BlackRock of Misleading Investors on ESG Agenda and Demands Immediate Action

BlackRock, the world’s largest asset manager, is facing accusations from Mississippi for allegedly misleading investors about its support for the progressive environmental social governance movement (ESG). The state has charged BlackRock with violating securities laws and pushing its political agenda on investors through fraudulent means.

Mississippi’s Secretary of State, Michael Watson, stated that investment companies should not impose their political agenda on Mississippians. He emphasized the importance of informed and educated decision-making when it comes to investing hard-earned money. In a March 26 administrative order, the state accused BlackRock of making untrue statements to investors regarding its involvement in promoting ESG factors on portfolio companies.

The order alleges that BlackRock has used its power as one of the world’s largest shareholders to pressure companies to conform to progressive causes, such as the Paris Agreement on global warming. Watson pointed out that BlackRock has voted in support of shareholder proposals that force target companies to set carbon dioxide emissions reduction targets and align their businesses with 2050 net-zero emissions goals. He called BlackRock’s statements to the contrary false or deceptive.

Mississippi has ordered BlackRock to cease and desist from making fraudulent statements, omissions, and other misrepresentations that could defraud investors. The state also demands that BlackRock stops offering funds in Mississippi that are marketed with claims that are materially misleading or likely to deceive the public.

This action by Mississippi follows a similar decision by Texas’ Board of Education to fire BlackRock as the manager of its $8.5 billion Permanent Education Fund. Texas officials claim that BlackRock’s support for ESG goals has been detrimental to local oil and gas companies. Aaron Kinsey, Texas Board of Education chairman, stated that the state should do business with those whose values align with theirs. BlackRock criticized Texas’ decision as unilateral and arbitrary.

In contrast to Texas’ boycott, Mississippi is threatening legal action against BlackRock. This is reminiscent of a lawsuit filed by Tennessee Attorney General Jonathan Skrmetti in December 2023, accusing BlackRock of violating state consumer protection laws and using shareholder power to push a political agenda. BlackRock has rejected these claims and stated that it discloses its investment practices and approach to proxy voting accurately.

Other conservative states have also criticized BlackRock for its alleged support of the ESG movement. In 2022, 19 state attorneys general wrote a letter to BlackRock, accusing the company of pressuring companies to comply with international agreements that aim to phase out fossil fuels. The letter highlighted BlackRock’s membership in net-zero organizations such as the Net Zero Asset Managers initiative (NZAMi) and Climate Action 100+. BlackRock dropped out of Climate Action 100+ in February, while JPMorgan Chase and State Street also withdrew. Vanguard, another major asset manager, left NZAMi in December 2022.

The Epoch Times reached out to BlackRock for comment on the Mississippi cease-and-desist order but did not receive a response at the time of press.

The accusations against BlackRock by conservative states like Mississippi and Texas highlight the growing tensions between ESG-focused investment strategies and traditional industries such as oil and gas. As more investors prioritize environmental and social considerations, asset managers like BlackRock face scrutiny for their role in influencing corporate behavior. The outcome of these legal battles will have significant implications for the future of sustainable investing and the responsibilities of investment firms.