Mississippi Secretary of State Michael Watson put the world’s largest asset manager on notice Wednesday, issuing a cease-and-desist order against BlackRock due to what the state claims are “false and misleading statements” regarding the firm’s environmental, social, and governance strategy, Fox Business reported.
The order was issued along with the Securities Division of the secretary of state’s office to “stop BlackRock’s alleged fraudulent actions and impose a multimillion-dollar administrative penalty.”
“BlackRock has issued several statements and actions in commitment of using all assets under its management to incorporate ESG considerations, including advancing the environmental goals of net zero carbon emissions,” the secretary of state’s press release read. “BlackRock also informed clients they would see better long-term financial prospects and financial outcomes through ESG-backed funds, with little to no evidence to substantiate the claim.”
Watson’s order also called out BlackRock’s doubling down on the Net Zero Asset Managers (NZAM) initiative.
The initiative with more than 315 signatories says it is “an international group of asset managers committed, consistent with their fiduciary duty to their clients and beneficiaries, to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.”
“BlackRock’s climate-disclosure reports demonstrate that BlackRock is actively working to fulfill its NZAM obligations by implementing a ‘sustainable’ net-zero investment strategy across ‘all assets under management,'” the order stated.
In a similar development last week, the Texas Permanent School Fund divested from BlackRock to the tune of $8.5 billion over its ESG policies. The management firm responded by saying Texas would be neglecting its fiduciary duties by the move and hurting those who have benefited from “BlackRock’s consistent long-term outperformance.”
Watson’s press release concluded by saying there was “little to no evidence to substantiate the claim” that BlackRock clients would see “better long-term financial prospects and financial outcomes through ESG-backed funds.”
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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