Florida said Thursday it has begun to divest $2 billion in funds overseen by BlackRock — a sharp rebuke of the giant asset manager’s investing policies under CEO Larry Fink that right-leaning critics have blasted as “woke capitalism.”
The divestment under Gov. Ron DeSantis – the largest of its kind by an individual state – is the latest sign of mounting unrest among Republican policymakers over so-called “ESG,” or environmental, social and corporate governance practices.
Florida’s chief financial officer, Jimmy Patronis, accused BlackRock of attempting to “uꦜse their power to influence societal outcomes.”
“Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” Patronis said. “It’s got nothing to do with maximizing returns and is theꦉ opposite of what an asset manager is paid to do. “
“Florida’s Tr🦹easury Diꦬvision is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns,” he added.
Florida’s state treasury has removed BlackRock as manager of roughly $600 million in short-term investments and have its custody bank freeze about $1.43 billion in long-term securities. The ✨decision was first .
Florida joined other Republican-led states, including Louisiana and Missouri, who have pulled💜 state funds from BlackRock’s control in response to concerns about ESG.
In a statement, BlackRock said that it was “surprised” by Flꦛorida’s🔯 decision to divest.
“As a fiduciary, everything we do𓃲 is with the sole goal of driving returns for our clients. We are surprised by the Florida CFO’s decision given the strong returns BlackRock has delivered to Florida taxpayers over the l𓃲ast five years,” the company said.
“Neither the CFO nor his staff have raised any performance concerns. We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries sho൩uld always value pꩵerformance over politics,” the company added.
In August, DeSantis – a frequent critic of so-called “woke” corporations – revealed that state pension funds could no longer consider ESG standards when making investments for retirees.
Florida’s three-member state Board of Administratio💝n, which is chaired by DeSantis, passed a resolution requiring fund managers to make uওse of state resources in a way that “prioritizes the highest return on investment” while bypassing the “ideological agenda” of ESG.
“Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate g𒐪overnance and diversity, inclusion, and equity,” DeSantis said in a statement at the time.
Fink has drawn scrutiny from Re💞publican lawmakers due to his public embrace of “stakeholder capitalism” as an investment strategy.
The BlackRock boss defended his stance in an open let𒆙ter to investors last ♛January, declaring that stakeholder capitalism is “not about politics.”
“It is not a social or ideological agenda. It is not ‘woke,’”ಌ Fink wrote in the letter. “It is capitalism, driven by mutually beneficial relationships between you and the em🍨ployees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”
