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Tags: ken paxton | blackrock | ceo | larry fink | esg | investing

Texas AG Paxton to Newsmax: BlackRock's ESG Investment Push Makes No Sense

(Newsmax/"America Right Now")

By    |   Saturday, 17 September 2022 03:46 PM EDT

Texas Attorney General Ken Paxton, one of the 19 attorneys generals speaking out to BlackRock CEO Larry Fink concerning the company's push to force states to take part in environmental, social and governance (ESG) based criteria when determining investments, told Newsmax on Saturday that such actions create changes that end up costing the states and investors money and does not "make a lot of sense."

"You've got these large companies like BlackRock and other companies like that that control trillions of dollars worth of assets and they control it for most of the country, and they go to these companies and force them to change policies," Paxton told "America Right Now." "In the end, that costs shareholders who are retirees, and people in my state, literally thousands of dollars, and it could be millions of dollars over a lifetime."

With ESG criteria, a set of standards is determined for a company's behavior to screen potential investments, according to Investopedia. Environmental standards examine how companies safeguard the environment, while social background deals with how companies manage relationships with employees, customers and others, while governance looks at companies' dealings with corporate leaders, internal controls and shareholder rights.

"What they do is they go to all these companies, and they try to get them to change their policy as it relates to climate change, and those policy changes affect the values of their shares, which in the end affects the value of everyone's accounts," Paxton said. "I've seen studies showing that potentially that creates a rate of return of 2% to 3%. Over a 40-year lifetime or of investing or 50 or longer, that could be millions of dollars and affects the quality of life and the standard of living of potentially every American."

Such moves, meanwhile, do not change the way the country operates, as someone down the line will have to supply such resources, but "they are hurting the shareholders that they're supposed to have an obligation to protect."

The ESG investment push also "lowers the standard of living for all of us," Paxton said. "That's a significant difference in return when compounded over a lifetime, so these policies that are being pushed by BlackRock and others like them hurt the American people."

Fink has rejected such arguments, posting in a letter to shareholders on BlackRock's website that backing ESG criteria "is not a social or ideological agenda."

"It is not 'woke,'" he added. "It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism."

BlackRock has also responded to the attorneys general's letter but Paxton said he does not think the investment giant addressed the matter in the way that had been hoped.

"I think the reality is we're going to have to keep pushing that we're going to start looking at our own state laws, and potentially we may have different lawsuits from different states," he said. "But I think that as attorneys general our obligation is to our shareholders in our retirement accounts, our retired teachers, or to other retired state employees, and each state is going to have to look at their losses and then they have to go back to the legislature and address these issues. In the end, it's our people that end up being hurt."


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Sandy Fitzgerald

Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics. 

© 2024 Newsmax. All rights reserved.

Texas Attorney General Ken Paxton is one of the 19 attorneys generals speaking out to BlackRock CEO Larry Fink on forcing states to take part in environmental, social and governance (ESG) based criteria when determining investments.
ken paxton, blackrock, ceo, larry fink, esg, investing
Saturday, 17 September 2022 03:46 PM
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