Major Pushback: North Carolina State Treasurer Calls For Resignation Of ESG-Pushing CEO

By Mark Whittington | Monday, 12 December 2022 12:00 PM
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Major Pushback: North Carolina State Treasurer Calls For Resignation Of ESG-Pushing CEO

ESG, or environmental, social, and governance, refers to an investment strategy that looks less at a company’s potential to profit and more at its social justice orientation.

A solar power company might be considered an ESG investment. An oil and gas company would not be considered ESG.

A company called BlackRock is a heavy advocate of ESG investments. Several state and local governments have used BlackRock to invest money for their public retirement systems and pension funds.

However, increasingly considering that the company is eschewing profit in favor of social justice considerations, North Carolina’s State Treasurer Dale Folwell has called for Blackrock’s CEO to resign. Folwell is especially concerned about Fink’s fixation on climate change and not following his fiduciary duty to maximize profits.

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According to the Daily Wire, Folwell stated, “As keeper of the public purse, my duty is to manage our investments to ensure that the best interests of those that teach, protect and serve, as well as of our retirees, are always paramount. Unfortunately, Larry Fink’s pursuit of a political agenda has gotten in the way of BlackRock’s same fiduciary duty. A focus on ESG is not a focus on returns and potentially could force us to violate our own fiduciary duty.”

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According to Just the News, the state of North Carolina has invested close to $14 billion in passive funds managed by BlackRock. The state has also bought $55 million of BlackRock stocks and bonds.

BlackRock has become one of the most successful asset managers, with $9.5 trillion in funds under its purview. The company has used the money it controls to promote companies that deal with climate change. Climate change is a phenomenon in which greenhouse gases such as carbon dioxide causes the planet’s average temperature to warm gradually.

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Folwell is especially concerned about BlackRock’s attacks on the fossil fuels industry. He stated, “BlackRock needs to be totally focused on returns for their clients, not on the political effort to ‘transform’ the economy into their vision of carbon zero. Fossil fuels will be the engine that drives the world’s economy for the foreseeable future. The only way that I can see BlackRock refocusing on their fiduciary duty to their clients is for a change at the top.”

Folwell has also supported laws like one recently passed in Texas that would force state pension funds to divest from companies that boycott the fossil fuels industry.

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