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As
a large and long-term investor in fossil fuel companies, "we
want to see these companies succeed and prosper," BlackRock
executives wrote in a letter that a spokesman confirmed was sent
at the start of the year to officials, trade groups and others
in energy-rich Texas.
"We will continue to invest in and support fossil fuel
companies, including Texas fossil fuel companies," states the
memo, signed by Dalia Blass, BlackRock's head of external
affairs, and Mark McCombe, BlackRock's chief client officer.
Although the message is consistent with its other statements,
the emphasis is new after years in which BlackRock has stressed
its efforts to take climate change and other environmental,
social and governance (ESG) issues into account in its
investment and proxy voting decisions.
BlackRock faces a balancing act as some pension funds and
endowments move to divest from fossil fuel stocks over
climate-change concerns, and because of its size. Like rivals,
BlackRock has declined to follow suit.
The U.S. securities regulator is developing a new rule on
corporate climate-change disclosures.
In Texas, new legislation requires the state's comptroller,
Glenn Hegar, to draw up a list of financial companies that
boycott fossil fuels. Those firms could then be barred from
state pension funds like the $197 billion Teacher Retirement
System of Texas, which has about $2.5 billion with BlackRock.
A spokesman for Hegar, a Republican, said via email his agency
is "currently working to establish suitable candidates for the
divestment list."
BlackRock in its letter wrote that "we have not and will not
boycott energy companies," and cited holdings in Texas-based
companies like Exxon Mobil Corp, ConocoPhillips and Kinder
Morgan Inc.
Texas Lt. Governor Dan Patrick, a Republican, has called on
Hegar to put BlackRock first on the list, citing among other
things BlackRock's statements in support of "net zero" targets
for companies to reduce emissions. That amounts to a boycott
under the new Texas law, Patrick wrote in a Jan. 19 letter, by
invoking environmental standards beyond federal and state laws.
Many other top asset managers including Vanguard Group and State
Street Corp have embraced similar efforts such as signing on to
the Net Zero Asset Managers initiative.
Patrick's office did not respond to questions.
BlackRock's letter was first made public online on Twitter by
Alex Epstein, author of a book backing the use of fossil fuels.
(Reporting by Ross Kerber; Editing by Marguerita Choy)
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