Texas subpoenas BlackRock for documents related to ESG push

FIRST ON FOX: The Texas state legislature subpoenaed BlackRock for a series of documents related to the billion-dollar financial institution's environmental, social and governance (ESG) policy push.

The subpoena, issued late last month by the Texas Senate Committee on State Affairs, represents the latest effort from the Republican-led state to slow the so-called ESG movement. Massive asset managers like BlackRock, Vanguard and State Street have increasingly pushed ESG standards upon companies in which they hold large financial stakes in an effort to push a broad green transition from traditional fossil fuel energy sources to alternatives like wind and solar.

In August, the Texas Senate Committee on State Affairs penned letters to BlackRock, Vanguard, State Street and Institutional Shareholder Services (ISS), a large financial advisory firm, for documents related to their ESG decision-making process. While Vanguard, State Street and ISS ultimately shared relevant information, BlackRock failed to hand over certain documents the committee had asked for.

"The Committee needs these documents to uncover the extent to which these firms have been playing politics using Texans’ hard-earned money. Next week we will hold a hearing where each firm will appear and give account to the people of Texas," Texas Republican state Sen. Bryan Hughes, the chairman of the Committee on State Affairs, told FOX Business in a statement. "While each firm has produced documents, some have provided more than others. BlackRock in particular has refused to provide documents it considers internal or confidential."

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"Accordingly, we have issued a subpoena to BlackRock for the production of additional documents the committee needs to complete its work," Hughes continued. "We will not allow these firms to continue to use Texans’ money to force a narrow political agenda. They have a legal duty to put their investors’ interests first, and we intend to make sure they do."

Hughes announced earlier this week that his committee would host a hearing on Dec. 15 to discuss impact ESG policies from Wall Street financial institutions has on Texans. The committee has invited high-ranking officials from the companies including BlackRock to testify at the hearing.

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Texas lawmakers and the state's comptroller Glenn Hegar have particularly zeroed in on how ESG standards may be harming Texas state pension plans which have relationships with the firms in question including BlackRock. They have also worried that the ESG push is simultaneously negatively affecting the state's massive oil and gas industry.

"The environmental, social and corporate governance movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy," Hegar said in August.

"Some of these firms may be using investments essentially owned by Texas to directly push shareholder initiatives that run contrary to the interests of our state," he added.

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In accordance with recently-passed state law, Hegar's office also published a list of financial institutions that it concluded have engaged in boycotts of energy companies. The list included BlackRock.

Meanwhile, more than a dozen other Republican-led states have also aggressively fought back against the ESG movement. For example, in October, both Louisiana and Missouri announced they would divest hundreds of millions of dollars from BlackRock's investment portfolio due to their ESG policies.

BlackRock didn't immediately respond to a request for comment.