Arizona has announced it will divest itself from BlackRock due to the company’s focus on ESG (environmental, social, and corporate governance) investing strategies.
Treasurer Kimberly Yee made the announcement in a statement that said her office had already “divested more than $543 million from BlackRock money market funds and reduced our direct exposure to BlackRock by 97% this year.” The statement noted BlackRock had moved “away from its fiduciary duty in general as an asset manager,” so it could focus on “political activism.”
The statement went on to say the divestment was ordered after the state’s Investment Risk Management Committee (IRMC) noted that BlackRock CEO Larry Fink had been writing annual letters to companies “dictating to businesses in the United States to follow his personal political beliefs.”
Yee’s statement continued, “We will continue to reduce our remaining exposure in BlackRock over time in a phased in approach that takes into consideration safe and prudent investment strategy that protects the taxpayers.”
Arizona is just the latest state to divest from BlackRock. Numerous Republican-led states have been divesting hundreds of millions of dollars from the investment firm in protest of the company’s political support of what they see as more left-leaning political policies, as well as efforts to encourage companies to adopt left-leaning political ideologies in order to receive investment funding.
Arizona’s divestment comes on the heels of Florida divesting over $2 billion in investment funds from the firm. Shortly before that, Louisiana pulled out $794 million, and before that Missouri withdrew $500 million from the firm’s management.
ESG investment strategies are a practice of choosing companies to invest in which espouse certain ideals regarding such issues as environmentally sound business practices, socially conscious behaviors such an emphasizing diversity in hiring, and supporting good governing principles. Proponents argue such practices can favor a company’s ability to operate in the modern world, and gain business advantage from governments which favor such ideologies, while critics say the practice is designed to emphasize supporting political ideology over sound investment strategy.
