GOP effort attacking firms on climate action
In West Virginia, the state treasurer has pulled money from BlackRock, the world’s largest asset manager, because the Wall Street firm has flagged climate change as an economic risk.
In Texas, a new law bars the state’s retirement and investment funds from doing business with companies the state comptroller says are boycotting fossil fuels. Conservative lawmakers in 15 other states are promoting similar legislation.
Officials in Utah and Idaho have assailed a major ratings agency for considering environmental risks and other factors, in addition to the balance sheet, when assessing states’ creditworthiness.
Across the country, Republican lawmakers and their allies have launched a campaign to try to rein in what they see as activist companies trying to reduce the greenhouse gases that are dangerously heating the planet.
“Energy accounts for hundreds of millions of dollars of tax revenue for us,” said Riley Moore, the West Virginia state treasurer. “All of our jobs come from coal and gas . ... This is part of our way of life here in the state. And they’re telling us that these industries are bad.”
“We have an existential threat here,” Moore said. “We have to fight back.”
In doing so, Moore and others have pushed climate change into the political battles over topics like voting rights, abortion and LGBTQ issues. In recent months, conservatives have used legislative and financial leverage to press the private sector to drop climate action and any other causes they label “woke.”
“There is a coordinated effort to chill corporate engagement on these issues,” said Daniella Ballou-Aares, CEO of the
Leadership Now Project, a nonprofit organization that wants corporations to address threats to democracy. “And it is an effective campaign. Companies are starting to go into hiding.”
The pushback has been spearheaded by a group of Republican state officials that has reached out to financial organizations, facilitated media appearances and threatened to punish companies that, among other things, divest from fossil fuels.
They have worked alongside a nonprofit organization that has run television ads, dispatched roaming billboard trucks and rented out a Times Square billboard criticizing BlackRock for championing what they call woke causes, including environmentalism.
These efforts come after years during which many in the financial sector boasted that they were prioritizing environmental, social and governance issues, also known as ESG, rather than
profits. That activism has often put companies at odds with the Republican Party, traditionally the ally of big business.
As the signs of a warming planet have grown more apparent over the past five years and as pressure has grown from consumers and liberal groups to take action, corporations have warmed to the notion of using capital and markets to create a cleaner economy. Faith-based groups, universities and foundations have divested from oil, gas and coal. New York state’s pension fund plans to start shedding its fossil fuels holdings, and Maine became the first state last year to require its Treasury and its public employee pension fund to divest from fossil fuels.
When President Donald Trump declared in 2017 that he would pull the United States from the Paris climate accord, more than 2,000 businesses and investors — including Apple, Amazon and Mars — signed a pledge to continue to work toward climate goals.
Then, in 2019, a group of senior business leaders promised to redefine “the purpose of a corporation” and prioritize the environment, workers and communities.
And a record number of banks, investors and companies at the United Nations climate talks in Glasgow, Scotland, last year committed to reaching net-zero — the point where their activities no longer add greenhouse gases to the atmosphere — by 2050.
Larry Fink, CEO of BlackRock, has been among the most outspoken executives, using his annual letter to corporate leaders to implore them to look beyond the bottom line and make a positive contribution to society.
In his most recent letter, issued in January, Fink made the case for what he calls “stakeholder capitalism,” saying there is a sound business rationale for taking up the fight against climate change and imploring other companies to act.
“Every company and every industry will be transformed by the transition to a net-zero world,” Fink wrote. “The question is, will you lead, or will you be led?”
Republican lawmakers, however, are becoming more organized in their efforts to slow corporate progress on climate issues.
Moore, the West Virginia state treasurer, coordinated a letter in November from 16 state treasurers and comptrollers to banks across the country, threatening “collective action in response to the ongoing and growing economic boycott of traditional energy production industries by U.S. financial institutions.”
In January, Moore pulled about $20 million out of a fund managed by BlackRock because the firm has encouraged other companies to reduce emissions. BlackRock still manages several billion for West Virginia’s state retirement system. “We’re divesting from BlackRock because they’re divesting from us,” Moore said.
In private, elected officials in conservative states have been even more blunt.
“These big banks are virtue-signaling because they are woke,” Gary Howell, a West Virginia state representative who sponsored a bill that would blacklist companies that have divested from fossil fuels, wrote in a Feb. 8 email to Moore. The message was obtained by Documented, a corporate watchdog group, under a Freedom of Information Act request. “They either shut up or get on the list, that is my goal,” he wrote.
Howell did not respond to a request for comment.
BlackRock’s Fink has emerged as a main target of conservatives. In June, BlackRock joined with Vanguard and State Street to help an activist hedge fund win three seats on Exxon’s board with the goal of pushing the energy giant to reduce its carbon footprint.
Months later, a nonprofit group called Consumers’ Research received an influx of funding from undisclosed donors and began running ads attacking Fink.
Will Hild, executive director of Consumers’ Research, told the Conservative Political Action Conference, in February that Fink and BlackRock had “helped vote on three radical environmentalists to the board of directors of Exxon whose stated goal is to get that company not focused on serving American consumers affordable gas but on Larry Fink’s personal politics.”
People familiar with BlackRock said the pressure was not changing the firm’s investment strategy. But the company has scrambled to limit the fallout in states like Texas, stressing that it is following the wishes of its clients and investing broadly.