Big Sky Times

Montana is one of 10 states with multi-billion-dollar state pension funds invested with BlackRock, an international investments-management firm which has drawn criticism from conservative groups for its investments in China and its focus on "net-zero" energy investments.

Consumers' Research (CR), a conservative consumer-advocacy and policies organization, alleges that BlackRock's investments in China risk the security and finances of the United States and its citizens. The concerns were outlined in a letter sent Dec. 2, 2021, to Montana Gov. Greg Gianforte, as well as governors from Washington, South Carolina, Florida, Oklahoma, New York, Pennsylvania, Nevada, Nebraska and West Virginia.

According to a report by the Daily Signal, Montana has $2.9 billion invested with BlackRock.

In the letter, CR issued a "Consumer Warning" against BlackRock, stating "The warning is meant to raise awareness among American consumers that BlackRock is taking their money and betting on China. 

"In so doing they are putting American security at risk," CR claims in the letter, "along with billions of dollars from U.S. investors, including many state-run pension plans."

The states whose governors received the letter are the top ten states whose public pension funds are invested in BlackRock, according to CR.

Some states where gas, oil and coal are big industries had already begun to move away from BlackRock over its stance on promoting sustainable-energy investments. Investments in sustainable energy such as wind and solar are often seen as a threat to those states' energy industries. 

Texas, with its vast oil and gas industry, and West Virginia, known for its coal production, were two of the states to push back against BlackRock's focus on investing in "net-zero" technologies and industries.

During its 2021 legislative section, Texas legislators passed Senate Bill 13, the Oil & Gas Investment Protection Act, which prohibits state entities such as pension funds from investing with financial companies that "boycott" traditional-energy companies. Texas Lt. Gov. Dan Patrick urged the state legislature to include BlackRock, the Houston Daily reported Jan. 25.

"BlackRock is capriciously discriminating against the oil and gas industry by exiting investments solely because companies do not subscribe to a 'net zero' policy beyond what is required by law," Patrick said in a speech to the legislature, according to the Houston Daily.

BlackRock Chairman and CEO Larry Fink responded to the claim by stating that the investment firm supported Texas's burgeoning hydrocarbon industry, in the capacity that it aided a transition to green energy.

In January, Fink released his 2022 letter to the CEOs of the companies in which BlackRock invests. In the letter, entitled "The Power of Capitalism," Fink writes that most stakeholders now expect companies to be proactive in working toward decarbonizing the global economy. 

"We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients," Fink wrote in the letter. He writes that in the two years since BlackRock first addressed climate risk as investment risk, projects and actions toward the transition to net-zero energy sources have resulted in sustainable investments of $4 trillion.

However, Fisk also writes moving to clean-energy will be a slow process and traditional energy sources will be relied upon during the transition. Fisk pointed out that traditional fuels such as natural gas will play an important role in power generation and heating to ensure affordable energy supplies during the transition. 

"Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero," Fisk wrote. "And BlackRock does not pursue divestment from oil and gas companies as a policy."

Despite Fink's assurances, however, West Virginia pulled its business from BlackRock.

On Jan. 17, West Virginia Treasurer Riley Moore announced that the Board of Treasury Investments, which manages the state's $8 billion in operating funds, will no longer use BlackRock Inc. The move was inspired by BlackRock's "net zero" investments, which Moore said would negatively impact the state's coal, oil, and natural gas industries.

Additionally, Moore noted BlackRock's investment in Chinese companies ran counter to the interests of the United States and would damage the manufacturing industry and job market in West Virginia. Moore highlighted significant financial risks associated with firms that invest heavily in China, “due to that country’s lack of free market protections, intellectual property rights and outright government interference in markets and business activities.”