North Carolina State Treasurer Calls For The Resignation Of BlackRock’s Larry Fink

North Carolina State Treasurer Dale Folwell called for the resignation of BlackRock CEO Larry Fink over his focus on the environmental, social, and governance movement, also known as ESG.

According to a letter sent on Friday and provided to The Daily Wire, the Tar Heel State’s public retirement system invests over $14 billion through the asset management company in a variety of passive and active funds. Folwell asserted that “ideological pressure” from Fink could lead to the use of ESG ratings against state and local governments, while initiatives related to climate change and other causes imply that the firm is not solely focused on maximizing profits.

“As keeper of the public purse, my duty is to manage our investments to ensure that the best interests of those that teach, protect and serve, as well as of our retirees, are always paramount,” Folwell wrote. “Unfortunately, Larry Fink’s pursuit of a political agenda has gotten in the way of BlackRock’s same fiduciary duty. A focus on ESG is not a focus on returns and potentially could force us to violate our own fiduciary duty.”

The move from the state of North Carolina occurs one month after Bluebell Capital Management, a small hedge fund based in London, called for the ouster of Fink, arguing that his emphasis on ESG has “alienated clients and attracted an undesired level of negative publicity.”

BlackRock has taken “voting action on climate issues” against dozens of its portfolio companies, according to an investment stewardship report published two years ago. Folwell noted that Fink opposed the election of two board members at ExxonMobil in 2020 because of “insignificant progress” toward implementing renewable energy projects. The move, however, preceded record demand for fossil fuels that has made the sector one of the few to produce robust stock market returns over the past year.

“There is no blue money or red money at the treasurer’s office, only green,” Folwell continued. “BlackRock needs to be totally focused on returns for their clients, not on the political effort to ‘transform’ the economy to your vision of carbon zero. Fossil fuels will be the engine that drives the world’s economy for the foreseeable future. The only way that I can see BlackRock refocusing on its fiduciary duty to its clients is for a change at the top.”

Folwell is the first Republican state treasurer to call for the resignation of Fink. Officials in states such as South Carolina, Louisiana, Missouri, West Virginia, and Florida have divested billions from the asset management company, as well as other firms such as Vanguard and State Street. Lawmakers in the state of Texas subpoenaed BlackRock this week for documents related to the firm’s support of the ESG movement; a hearing with the three companies, as well as Institutional Shareholder Services, is scheduled for December 15.

When asked why he did not move to divest funds from BlackRock alongside other states, Folwell told The Daily Wire that the ouster of Fink would allow residents to “get the value that BlackRock index firms offer” without the executive’s “misguided focus on ESG.”

Skepticism of ESG from state officials and private funds has prompted asset management companies to amend their support of the movement. Vanguard severed ties with the Net Zero Asset Managers initiative, under which firms commit to moving portfolio companies toward eliminating net carbon emissions by 2050, while BlackRock announced that institutional clients will be able to vote their own shares rather than allow the company to act as a proxy.

Folwell, noting the existence of reforms at BlackRock permitting investors in certain pooled vehicles to “have some degree of control over their voting,” said in the letter that “the existence of the proxy voting program does not mitigate the need for a new direction at BlackRock.”

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