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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