Texas Schools Fund Yanks $8.5B BlackRock Contract Over ESG

The Texas Permanent School Fund (PSF) decided Tuesday to pull an $8.5 billion investment with New York-based global investment manager BlackRock Inc. over the financial institution’s support for environmental, social, and governance (ESG) criteria in its investment decisions.

State Board of Education Chairman Aaron Kinsey said in a statement posted to X, formerly Twitter, that the PSF “was not in compliance with” Texas law by investing with BlackRock, noting that the state of Texas prohibits state investment in companies like BlackRock that boycott energy companies.

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,” Kinsey said. Terminating the state education fund’s contract with BlackRock “ensures PSF’s full compliance with Texas law,” Kinsey explained.

“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,” Kinsey said. “Blackrock’s destructive approach toward the energy companies that this state and our world depend on is incompatible with our fiduciary duty to Texans.”

“Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street,” Kinsey added. “This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students.”

BlackRock replied with a statement saying, “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.”

Meanwhile, conservatives are praising Texas’ decision. In a post on X, formerly known as Twitter, former Republican presidential candidate Vivek Ramaswamy noted that it was “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.”