Red State Slaps Wall Street Titan With Cease And Desist Order Over ‘Fraudulent’ Claims About Green Investments

Mississippi Secretary of State Michael Watson sent a cease and desist letter to investment manager giant BlackRock on Tuesday night over claims the company misleads clients about its involvement in environmental, social and governance (ESG) investing.

The letter claims that BlackRock incorporates ESG factors into its investment funds that are designated as non-ESG due to a broader commitment to have all assets under management advance the agenda of reducing carbon emissions to “net zero.” The order also serves as a notice of intent to impose administrative penalties on BlackRock for its use of ESG factors when managing investment accounts to prevent “immediate and irreparable public harm.”

“Investment companies will not push their political agenda on Mississippians, especially through fraudulent and deceptive means,” Watson said in a statement to the Daily Caller News Foundation. “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.”

The letter also claims that BlackRock is misleading customers about its ESG funds by saying that ESG is beneficial for companies’ long-term financial results and that it generates better outcomes for funds. The demands of the letter would require BlackRock to stop misleading investors through its use of ESG or no longer market funds in the state.

“Many policymakers and government officials have ideas on how we should invest our clients’ assets,” BlackRock told the DCNF. “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.”

BlackRock, in its “2030 net zero statement,” argues that transitioning to zero emissions by 2050 would benefit the economy as a whole and, in turn, clients due to the supposed consequences of not reducing emissions.

Other public entities have also moved to take action against ESG investing, such as Texas schools pulling their $8.5 billion pension fund from BlackRock. Florida passed a resolution in 2022 that banned state fund managers, such as pensions, from considering ESG factors when managing funds.

ESG investing has been facing increasing backlash over the last few years, including from Congress, with House Judiciary Committee Chairman Jim Jordan issuing several subpoenas in December to top financial firms, including BlackRock, over collusion concerns. The allegations of collusion stem from several financial firms’ involvement in an environmental coalition called Climate 100+, which BlackRock exited with its domestic business earlier this year but has remained involved with its international arm.