'Investment companies will not push their political agenda': Mississippi issues BlackRock cease and desist over ESG agenda

Mississippi Secretary of State Michael Watson issued a cease and desist order on Tuesday against asset management company BlackRock, claiming that the firm "repeatedly made false and misleading statements" concerning its environmental, social, and governance agenda, Fox Business reported.

Watson, along with the Securities Division of the Secretary of State's Office, issued the order "to stop BlackRock's alleged fraudulent actions and impose a multimillion-dollar administrative penalty," according to a Wednesday press release.

Watson accused BlackRock of deceiving Mississippi investors regarding the firm's "involvement in pushing ESG factors on portfolio companies."

The order stated that BlackRock claims its non-ESG "funds do not follow an ESG investment strategy." Watson argued that this is untrue.

"BlackRock has issued several statements and actions in commitment of using all assets under its management to incorporate ESG considerations, including advancing the environmental goals of net zero carbon emissions," the Secretary of State's press release read. "BlackRock also informed clients they would see better long-term financial prospects and financial outcomes through ESG-backed funds, with little to no evidence to substantiate the claim."

As an example, the order pointed to BlackRock's commitments to the Net Zero Asset Managers initiative.

"BlackRock's climate-disclosure reports demonstrate that BlackRock is actively working to fulfill its NZAM obligations by implementing a 'sustainable' net-zero investment strategy across 'all assets under management,'" it explained.

The cease and desist order stated that BlackRock also misled Mississippi ESG investors by marketing the funds as financially beneficial. Additionally, it claimed the firm charged higher fees for ESG funds than for non-ESG funds.

In a statement to Fox Business, Watson said, "Investment companies will not push their political agenda on Mississippians, especially through fraudulent and deceptive means."

"All citizens should have the opportunity to make informed and educated decisions when investing their hard-earned money. If not, our office will hold these bad actors accountable," he added.

BlackRock told Fox Business it is committed to following the law in "every respect."

"Many policymakers and government officials have ideas on how we should invest our clients' assets," BlackRock said. "We are always bound to invest consistent with our clients' choices, their best financial interests, and applicable law. Our only agenda is maximizing risk-adjusted returns for the funds our clients choose to invest in. We operate in one of the most highly regulated industries in the country and are committed to following the law in every respect."

Last week, Texas pulled an $8.5 billion investment managed by BlackRock. Texas State Board of Education Chairman Aaron Kinsey explained that the decision was based on the asset management company's "destructive" commitment to ESG. He accused the firm of violating the state's Senate Bill 13, which prohibits "investments in companies that boycott certain energy companies."

BlackRock fired back, calling Texas' decision to pull its investment "reckless" and "irresponsible." The company's vice chairman, Mark McCombe, said the state prioritized "short-term politics over your long-term fiduciary responsibilities."

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BlackRock calls Texas' $8.5 billion divestment 'reckless' and 'irresponsible': 'Political-driven decision making'

Asset management company BlackRock called Texas' decision to pull an $8.5 billion investment this week "reckless" and "irresponsible," Fox Business reported.

On Tuesday, Aaron Kinsey with the Texas State Board of Education announced that the state's Permanent School Fund, which supports public schools, would withdraw billions of dollars of investments placed with BlackRock, citing the firm's commitments to environmental, social, and governance.

In 2021, the state passed Senate Bill 13, prohibiting "investments in companies that boycott certain energy companies." Texas Comptroller Glenn Hegar reported last year that BlackRock was one of several investment firms "playing politics" with Americans' retirement money by boycotting fossil fuel energy companies.

"The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office," Kinsey stated. "Terminating BlackRock's contract ensures PSF's full compliance with Texas law."

"BlackRock's dominant and persistent leadership in the ESG movement immeasurably damages our state's oil and gas economy and the very companies that generate revenues for our PSF," Kinsey added.

In response to Kinsey's announcement, BlackRock released a statement declaring that the asset management company is "helping millions of Texans invest and save for retirement." The firm denied the claims that it boycotts energy companies and called the decision to pull the funds "arbitrary."

On Friday, Fox Business reported that BlackRock Vice Chairman Mark McCombe sent a letter to Kinsey stating he was "dismayed" by the announcement, which he claimed prioritized "short-term politics over your long-term fiduciary responsibilities."

"We fully comply with Texas law and fundamentally disagree with your assessment based on BlackRock's performance for Texas PSF and our investments in Texas energy companies. Additionally, Senate Bill 13 makes clear divestment is not required when a government entity determines divestment is inconsistent with its fiduciary responsibilities," McCombe wrote. "The outperformance BlackRock has demonstrated shows divestment would not be in the best interest of Texas PSF."

He urged Texas to reconsider and claimed that not all PSF board members were made aware of the decision to terminate the relationship.

"We learned of your decision to end Texas PSF and BlackRock's 18-year relationship through a press release. Ending a long, successful partnership that's been a positive force for thousands of Texas schools and families in such a reckless manner is irresponsible," McCombe continued. "How our clients invest and whom they entrust to manage their money is entirely their decision, but we feel an action of this magnitude warrants transparency and consensus — not political-driven decision making. Texas schools and families deserve that."

Today, Texas Permanent School Fund leadership delivered an official notice to global asset manager BlackRock terminating its financial management of approximately $8.5 billion in Texas\u2019 assets.\n\nMy statement:
— (@)

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Texas divests $8.5 billion from BlackRock, citing firm's 'destructive' ESG push

Texas notified investment management company BlackRock on Tuesday that it plans to yank a $8.5 billion investment, citing the firm's "destructive" environmental, social, and governance push, Fox Business reported.

Texas State Board of Education Chairman Aaron Kinsey told the news outlet that the Texas Permanent School Fund, which has previously placed investments with BlackRock, will pull the funds. Kinsey explained that the move ensures the PSF, a fund created to support public schools, complies with state law.

The state passed Senate Bill 13 in 2021, prohibiting "investments in companies that boycott certain energy companies." The measure requires the state comptroller to maintain a list of investment firms boycotting fossil fuel energy companies. In November, Texas Comptroller Glenn Hegar announced the addition of five financial companies to the list.

"Texas has been a leader in calling out investment firms that have been playing politics with the retirement money of hard-working Americans. Our goal has always been to bring some honesty to what has really been a one-sided and intellectually dishonest discussion," Hegar stated at the time.

"I wanted to end the doublespeak by so many companies and show the critical impact that fossil fuels have on our daily lives," he added.

Fox Business reported that Hegar urged the PSF and five state pension funds to end their relationships with BlackRock.

"The Texas Permanent School Fund has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office," Kinsey said Tuesday. "Terminating BlackRock's contract ensures PSF's full compliance with Texas law."

Kinsey argued, "BlackRock's dominant and persistent leadership in the ESG movement immeasurably damages our state's oil and gas economy and the very companies that generate revenues for our PSF."

He accused the company of having a "destructive approach toward the energy companies that this state and our world depend on [which] is incompatible with our fiduciary duty to Texans."

The $8.5 billion represents a significant portion of the PSF's $53 billion fund. Kinsey noted that the state and the PSF "have worked hard to grow this fund to build Texas' schools."

Texas' decision to pull the funds marks the largest divestment from BlackRock.

"Today represents a major step forward for the Texas PSF and our state as a whole. The PSF will not stand idle as our financial future is attacked by Wall Street," Kinsey remarked. "This bold action helps ensure our PSF remains in fact permanent and will continue to support bright futures and opportunities for generations of Texas students."

A BlackRock spokesperson told Fox Business, "BlackRock is helping millions of Texans invest and save for retirement."

"On behalf of our clients, we've invested more than $300 billion in Texas-based companies, infrastructure and municipalities, including $125 billion invested in the energy sector, including a $550 million joint venture with Occidental. We recently hosted an energy summit in Houston designed to explore how to strengthen Texas' power grid," the company added.

"Today's unilateral and arbitrary decision by Board of Education Chair Aaron Kinsey jeopardizes Texas schools and the families who have benefited from BlackRock's consistent long-term outperformance for the Texas Permanent School Fund," BlackRock continued. "The decision ignores our $120 billion investment in Texas public energy companies and defies expert advice. As a fiduciary, politics should never outweigh performance, especially for taxpayers."

Last year, BlackRock CEO Larry Fink declared that he would no longer use the "weaponised" term "ESG," stating that it has become too politicized on both sides of the aisle, Reuters reported. He noted he was "ashamed of being part of this conversation."

Arizona, Arkansas, Florida, Louisiana, Missouri, South Carolina, Utah, and West Virginia have made similar divestments.

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Conservative group launches anti-ESG text service that helps shoppers identify products made by woke companies

A conservative group has launched a new alert system that helps grocery shoppers spot products peddled by corporate behemoths that have a hand in the advancement of the left's woke agenda.

While those championing the service suggest it will "help consumers make better-informed decisions," leftists claim this anti-ESG technology is regressive.

Every purchase a battle won or lost

According to the New York Times, consumer rights activist Fredrick J. Schlink co-founded the Consumer's Club with Stuart Chase with the aim of protecting the consumer "by publicizing defective and unsafe products." They incorporated this club as the nonprofit Consumers' Research Inc. in 1931, making it America's first independent organization to test consumer products and report on them by brand name.

When Schlink stood firm against the demands of suspected communist labor unions in the mid-30s, strikers left Consumers' Research and founded the competing Consumers Union, which published Consumer Reports.

Despite this schism, the original organization persisted.

Will Hild, who previously worked with the Federalist Society and other conservative organizations, became the executive director of Consumers' Research in 2020, then championed the launch of the Consumers First Initiative the following year, seeking to put "corporations on notice that they need to start serving their customers, not woke politicians."

Consumers' Research has since sought to fight environmental, social, and governance initiatives, noting that ESG is wielded by political activists and their ideological allies in the business community to "drive a progressive agenda ... through economic coercion and ignoring democratic processes."

The Washington Post reported in January, "Consumers’ Research has morphed into aself-styled watchdog of liberal causes. It has singled out ESG, which it argues harms consumers, reduces investment returns and contributes to inflation."

Its budget reportedly grew tenfold to over $8 million in 2021, and its 2022 budget was likely $2 million higher.

Leonard A. Leo, the Federalist Society’s co-chairman, told the Post, "Consumers’ Research and its leader Will Hild are executing the most impactful pushback I know against ESG and other aspects of woke corporate culture. ... It’s time that businesses that are out of step with the sentiments of most Americans pay a price for their standing up for woke special interests instead of consumers."

Woke alerts

Axios reported that as of Friday, Consumers' Research is offering "Woke Alert": a free text service that notifies grocery shoppers which brands are linked to the left's cultural, economic, and social agendas.

The sign-up page says, "Many corporations are putting progressive activists and their dangerous agendas ahead of customers. They'll only succeed if we look the other way."

Subscribers to the service are alerted when an organization or brand ceases to merely sell a product and instead begins peddling a radical ideology or participating in wokery.

For instance, subscribers would have recently received a woke alert about Jack Daniel's. The alert indicated that the recent Jack Daniel's "Small Town, Big Pride" advertising campaign featured drag queens, one of whom stressed “drag culture — which is all about … inviting others to accept you as you are.”

Shoppers with little time on their hands are spared the legwork and provided supporting evidence for the alerts; in this case, a Newsweek article detailing the Jack Daniel's boycott over claims the company has "gone woke."

Already, there have been woke alerts about Anheuser-Busch, BlackRock, Silicon Valley Bank, the American Women's History Museum, Apple, Puffin Books, the National Football League, and others.

According to Axios, the organization is kicking off a six-figure digital ad campaign this week to promote "Woke Alert."

Leftists already upset

Rep. Robert Garcia (D-Calif.), touted as Congress' first openly gay representative, told Axios, "The right wing is hell-bent on moving our country backwards, and this new text service is laughable."

Anna Bahr, a political consultant with Left Flank Strategies, said, "I hate to break it to the radical right, but people in this country are a lot more concerned about paying for an eighty-dollar tank of gas than the color of their Budweiser bottle."

In response to Bahr's claim, the State Financial Officers Foundation noted, "Americans are equally concerned about the #ESGscam that's causing $80 tanks of gas."

\u201cSign-up for Woke Alerts today at:\n\nhttps://t.co/UPRoU5PpgA\u201d
— Consumers' Research (@Consumers' Research) 1681474629

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ESG-supporting Bank of America offers zero down payment, zero closing cost mortgages – but only for black and Hispanic communities

The Bank of America Corporation announced new zero down payment, zero closing cost mortgages – but the offer is only available for black and Hispanic communities.

On Tuesday, Bank of America rolled out a new "special purpose credit program" called the "Community Affordable Loan Solution." Bank of America said that the zero down payment, zero closing cost mortgages will only be available to first-time homebuyers in "black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles, and Miami."

The press release from Bank of America did not mention that the offer was available to other minority communities, such as Asian, Native American, or Pacific Islander. The lender also did not make the offer to white communities.

"Homeownership strengthens our communities and can help individuals and families to build wealth over time," said AJ Barkley, head of neighborhood and community lending at Bank of America. “Our Community Affordable Loan Solution will help make the dream of sustained homeownership attainable for more black and Hispanic families, and it is part of our broader commitment to the communities that we serve.”

Barkley told Bloomberg that applicants don't need to disclose their race. The megabank will utilize U.S. Census data to determine which eligible neighborhoods are predominately black or Hispanic.

ESG-supporting Bank of America said, "The Community Affordable Loan Solution aims to help eligible individuals and families obtain an affordable loan to purchase a home."

The advantageous mortgage program will not use credit scores, but instead will be "based on factors such as timely rent, utility bill, phone, and auto insurance payments."

NBC News noted, "The loans require no mortgage insurance — the additional fee typically charged to buyers who put down less than 20% of the purchase price."

Bank of America stated, "Individual eligibility is based on income and home location."

Bank of America justified the enticing mortgage program by citing a report from the National Association of Realtors that found that the homeownership rate for black Americans was nearly 30% less than white Americans in 2020. The gap between white Americans and Hispanic Americans was nearly 20 percentage points.

The report also noted that Hispanic American homeownership is at an all-time high and above 50% for the first time. In addition, the report said that Asians were the racial group least likely to be rejected for mortgage loans.

According to data compiled by Bloomberg, "Approval rates for homeowners looking to lower their payments have also varied by race, with BofA approving 66% of black refinancing applicants and 78% of white ones in 2020."

There is no minimum or maximum loan size under the Community Affordable Loan Solution.

Bank of America did not specify the scope of the program.

Bank of America also announced the launch of a new "Small Business Down Payment Program." The special purpose credit program will cater to minority and women business owners in an effort to "help create generational wealth opportunities" for "historically disadvantaged small business borrowers."

The National Fair Housing Alliance defines special purpose credit programs as "a way for financial institutions to meet the special credit needs of people who have been impacted by lending discrimination, systemic racism, and redlining."

In February, the Bureau of Consumer Financial Protection (CFPB) – "an independent bureau within the Federal Reserve System" created after the Great Recession that "empowers consumers with the information they need to make financial decisions in the best interests of them and their families" – urged "lenders to explore opportunities available to them to increase credit access through special purpose credit programs (SPCPs) to better serve historically disadvantaged individuals and communities."

Brian Moynihan is the CEO of Bank of America and the chairman of the World Economic Forum’s International Business Council.

Bank of America boasts of a collaboration with the WEF "to support social and environmental progress through investment, philanthropy, and responsible business operations."

In May, Moynihan told Financial News that the transition to ESG is a “big business opportunity” for the bank.

In March, Politico noted that Moynihan had "pushed an environmental, social, and governance agenda that seems to be working for shareholders" since he was named the CEO of Bank of America.

A blog post on the Bank of America website posted in January 2021 reads: "While profits and shareholder value remain vital, stakeholder capitalism places a high value on environmental, social and governance (ESG) issues. Stakeholder capitalism repositions capitalism to play an essential role in solving climate change, poverty, hunger, and other challenges outlined in the United Nations Sustainable Development Goals (SDGs)."

\u201cCEO Brian Moynihan talks about the importance of standardized #ESG metrics and how the private sector can lead the charge while supporting #stakeholdercapitalism. Watch the @WEF replay here: https://t.co/ejf8HWkH9s #DavosAgenda\u201d
— Bank of America News (@Bank of America News) 1611701393

In October 2020, the WEF applauded Moynihan for "driving the creation of the ESG metrics, a special set of metrics related to environmental, social and governance issues that help companies measure how they're doing well for society."

At the same time, Moynihan wrote on the WEF website, "Clear signals that corporations are focused on environmental, social, and governance (ESG) priorities at the same time they are providing great shareholder returns is what our employees, clients, customers, and society need."

Reuters reported on Wednesday, "Bank of America Corp. is expanding its newly formed environmental, social and corporate governance (ESG) advisory and financing solutions team with four new hires, according to an internal memo seen by Reuters."

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