Republicans in Texas continue to question ESG investment strategies, putting financial giants like Blackrock and State Street on the defensive. The state is the nation's top producer of crude oil and natural gas production.
Texas lawmakers gave US financial industry executives a run for their money at a hearing last week.
The topic was environmental, social and governance (ESG) policies in the state's pension fund investments.
Too «Woke?»
The Republican-led committee called the hearing because of growing concerns in the party that financial firms are pushing a «woke» ideology with ESG-related investment rules.
A «Bloomberg» (behind paywall) reported said representatives from Blackrock, State Street, and Institutional Shareholder Services were invited to defend their practices before the committee.
Republican Senator Lois Kolkhorst cited, among other things, a «Harvard Business Review» study this year showing ESG funds tend to lag the overall market. «We have a commitment to our retired teachers and we have a commitment to our retired state employees to do better with our money», the senator said.
Frequent Target
The committee is focused on how ESG policies can affect Texans' retirement savings, although it is part of a broader movement of Republican politicians targeting ESG. Blackrock, as the world's largest asset manager, is a frequent target.
Florida has asked state pension funds to drop Blackrock as an asset manager because of ESG concerns. In August, Texas put the asset manager on a list of companies that the state believes are boycotting the energy industry, with UBS also finding itself on a blacklist.
Largest Energy Producer
According to the Energy Information Agency's (EIA) US energy atlas, Texas is the top crude oil- and natural gas-producing state in the country, accounting for 43 percent of the nation's crude oil production and 25 percent of its marketed natural gas production last year.
