by Paul Mueller and Thomas Savidge
The American Institute for Economic Research
In late March, the Texas Permanent School Fund (TPSF), a perpetual fund established to support Texas public schools, announced it was pulling $8.5 billion from BlackRock. The TPSF pulled this money because the asset manager was using investor funds to push Environmental, Social, and Governance (ESG) practices by boycotting fossil fuel and energy companies. While BlackRock holds some shares in fossil fuel companies such as ExxonMobil, Philips 66, Occidental Petroleum, and Valero Energy in its massive portfolio, over the past several years the company has called for “Sustainability as BlackRock’s New Standard for Investing.” That means it actively encourages other companies it owns shares in, such as large financial and insurance firms, to shift away from fossil fuels. Hence the 2021 Texas law requiring state agencies to divest from companies that “shed investments to reduce greenhouse gas emissions,” which TPSF cites in its letter to Blackrock.