EXCLUSIVE: GOP finance leaders demand answers from BlackRock on ESG agenda for ‘awakened capitalism’ and dubious trade in coal, China and climate change

Fifteen Republican state finance leaders are examining whether directors of BlackRock mutual funds are sufficiently independent of the giant asset manager, questioning their investments in China, coal and climate change.

The group expressed concern about the governance of mutual funds as part of a broader battle against the growing influence of environmental, social and governance (ESG) values ​​in business.

The letter, dated Aug. 2 and obtained this week by DailyMail.com, was addressed to ten members of BlackRock’s Fixed-Income Board of Directors, which oversees the group’s closed-end mutual funds.

BlackRock says board members act in the best interests of all fund shareholders.

“We are concerned that your board is sufficiently independent to oversee BlackRock’s performance as an investment advisor,” the letter reads.

BlackRock CEO and Chairman Larry Fink says ESG investments have been ‘misused by the far left and far right’

“Most of you are employed by BlackRock or hold additional positions as board members of publicly traded companies in which BlackRock has a significant stake.”

The GOP letter states that “these personal entanglements” “could easily impair a director’s ability to exercise independent judgment in reviewing possible BlackRock misconduct.”

Derek Kreifels, CEO Stichting Staatsfinancien warns against ‘political agenda’

The finance officials are concerned about investment choices “in response to outside pressure from large institutional clients” that help fight climate change but do not enrich investors.

Fund managers pulled out of coal, which causes more carbon pollution than other energy sources, causing investors to miss out on a “massive rise in stock prices within the coal industry,” the letter said.

Meanwhile, BlackRock has “poured billions of dollars into China” as the first foreign company to be allowed to operate there, though doing so came with “potential financial risks for its customers,” the letter said.

This also harms the “national security interests of the US and other democracies,” the letter said.

Critics have raised similar issues in the past about whether well-paid mutual fund managers are able to speak up.

GOP finance leaders are applying that concern in the context of positions BlackRock has taken on ESG issues, such as a call for portfolio companies to be accountable on climate change.

They are asking for responses to guide their states on whether or not to invest in BlackRock funds.

The document follows up last month’s letter from 15 Republican attorneys general to the same administrators, asking about financial relationships that could undermine their independence.

BlackRock chief spokesman Chris Van Es confirmed that the letter had been sent to the directors.

Board Members’act in full compliance with their fiduciary duties and in the best interests of all fund shareholders,” he told DailyMail.com.

Derek Kreifels, CEO of the State Financial Officers Foundation, said the letter draws attention to “disturbing conflicts” between BlackRock and its “supposedly independent” board of directors.

“There is no way of knowing whether BlackRock is acting in the best interest of shareholders or pushing a political agenda,” Kreifels said in a statement.

Will Hild, director of Consumers’ Research, a non-profit organization, said the “ESG scam” got out of hand.

“The fact that BlackRock doesn’t even follow their own rules shows how corrupt these ESG extremists really are,” says Hild.

ESG refers to a set of standards for a company’s behavior that help investors put their money where their mouth is, for example financing wind farms to fight climate change, while pulling out of damage-causing oil and tobacco giants.

“ESG is a fad and fad,” says Will Hild, director of Consumers’ Research, a policy nonprofit organization

Does investing in green technology help investors by reducing the long-term risks of global warming? The debate rages

The strategy becomes especially controversial when it directs funding to companies that promote diversity, equality, and inclusion (DEI), angering conservatives who say they help women and minorities by sidelining white men.

This has led to a tricky debate about whether efforts to make society fairer and reduce carbon emissions benefit investors by mitigating the risks of climate chaos and social disorder.

Larry Fink, CEO of BlackRock, one of the early pioneers of ESG investing, announced in June that he would no longer use the term, saying it has been “misused by the far left and far right.”

House Republicans held a series of hearings last month, calling for the Securities and Exchange Commission’s efforts to enforce more transparent corporate disclosure rules on ESG-related factors to be quashed.

In addition to targeting the SEC, GOP politicians are pushing for tighter oversight of proxy advisory firms and also favor limiting — or even excluding — ESG-focused investments from some pension funds.