Texas Two-Steps Away From ESG

Joan Sammon05 Apr, 2024 4 Min Read
Head Fink in charge.

Earlier this month Texas made history when the Texas Permanent School Fund (PSF) notified BlackRock, the world’s largest asset management firm, that the state was pulling $8.85 billion of Texas state employee pension fund investment dollars from BlackRock due to the firm’s continued boycotts of energy companies. The move underscores the ongoing and growing tension between investors and activist asset-fighting "management firms, like BlackRock which have been using the environmental, social and governance (ESG) construct, under the pretense of climate change," as a mechanism to reorient the capital markets toward industries, technologies and companies that support their political world view and financial enrichment in a myriad of ways-- with little regard to the investors, whose capital is at risk.

Having been directly warned in 2021 of this potential outcome by Texas state officials, the Texas State Board of Education Chair, Aaron Kinsey confirmed to BlackRock that the Texas PSF was terminating a contract in order to comply with the 2021 Texas state law that curbed agencies' business with asset-management firms that boycotted energy companies. Something BlackRock routinely asserts it does not do.

"The Texas Permanent School Fund 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 in a statement. "Terminating BlackRock’s contract ensures PSF’s full compliance with Texas law."

Be sure to count your fingers after shaking.

Upon receipt of the news BlackRock vice-chairman, Mark McCombe, wrote to Kinsey reminding him that the firm had generated $250 million for PSF since 2006, while reiterating previous rejections of the allegation that BlackRock discriminates against oil and gas firms. McCombe further defended his firm by explaining that they have $320 billion invested in energy investments globally, and $120 billion in Texas-based public energy companies alone.

What he failed to detail, however is that many of their “investments in oil and gas companies” are dedicated to cockeyed side-show investments in "carbon capture," wind farms, and solar fields -- now all proving to offer failed economics, but offering high ESG scores on which BlackRock -- like so many other companies in corporate America -- has placed nearly religious-like emphasis.

BlackRock leverages its controls through proxy voting in companies in which it invests, often forcing investor dollars into these “green” energy production schemes that are not only economic flops, but are also insufficient to replace lost capacity offered by fossil fuel. Bluebell Capital recently confirmed the same practice at BP—where their board similarly boondoggled their green investment initiatives, causing diminished returns for Bluebell.

BlackRock execs on one hand claim ESG success by forcing economic losers like wind and solar into the market, while blatantly ignoring that the entire green energy supply chain is built on Chinese slave labor, non-existent Chinese environmental regulations, and back doors for industrial espionage, built into Chinese-made solar panels, electric-grid components and computer hardware -- revealing a radical anti-societal and anti-environmental reality for which no negative score will ever be assessed by BlackRock or anyone else. Could it be that ESG is not actually about the environment or societal improvement at all? What if it were something more destructive and sinister?

Demonizing the folks who keep the country moving.

BlackRock, led by the most strident of ESG advocates, CEO Larry Fink, forcibly shoves ESG adoption down the throat of publicly traded companies in which it invests. With $10 trillion under management, the firm is a powerhouse of massive scale in the asset-management world. Those who need capital are beholden to any group with capital. Firms like BlackRock, and the boards they seat, dictate the rules.

Driven by a "might makes right" corporate attitude, BlackRock is unaccustomed to being challenged. But in recent years, as their efforts to force ESG into investment decisions in defiance of the legally mandated "sole interest" rule, their presumption of moral superiority is being rejected by investors. They are tiring of the hubris now associated with the BlackRock brand and are demanding accountability: corporate swagger is increasingly seen by many as cronyism and political activism underpinned by a belief that their obligations as a fiduciary are somehow open to their own interpretation—the law be damned.

The ESG charade began over two decades ago when the World Economic Forum introduced the scheme as a way to re-orient the capital markets. With Fink also a WEF Trustee, there was an immediate conflict of interest unique to BlackRock. Decades later the two entities are by now inextricably entwined with totalitarian overtones. Attempting to create light between his schizophrenic efforts, Fin announced at the beginning of this year that he will no longer use the phrase he helped promote -- “ESG” -- but instead is opting for “stakeholder capitalism,” a modern term for communism, “sustainable investing,” and “climate investing.” Regardless of what he calls it, the purpose of ESG remains the same: the reorientation of the capital markets using other people’s money to fund things investors don't want as their principal concern.

The WEF, a supra-national organization that advocates for a global government underpinned by the quasi-Marxist ideology of ESSG, employs the pretense of a brewing "climate catastrophe" to disguise its totalitarian goals. As the progenitors of ESG, the WEF incentivized corporate partners such as BlackRock, and many other non-profits and NGOs, to promote a false narrative of "climate catastrophe" in an effort to achieve control of the capital markets.

And so ESG was created to do exactly what firms like BlackRock have been attempting to do -- forcibly redirect investor dollars to "investments" the global elite care about but are not economically justifiable in a capitalist system. The only question now is whether other investors will keep letting them do it. Perhaps Texas can set an example.

Joan Sammon is the founder of a boutique oil and gas advisory firm that develops strategies for an array of business & market challenges. As an ESG expert she explains the threat of ESG to her corporate clients.


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One comment on “Texas Two-Steps Away From ESG”

  1. $250 million on a 8.5+ billion portfolio is only like 3% over just one year, let alone over 17. There has to be a decimal place wrong in the article you linked to. Either that or someone is doing some major embezzlement.

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