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Missouri joins the anti-ESG movement and withdraws $500 million from BlackRock

Missouri State Treasurer Scott Fitzpatrick announced that the Missouri State Employees Retirement System (MOSERS) has sold all public equities managed by BlackRock, totaling approximately $500 million, claiming that BlackRock prioritizes "a woke political agenda over their customers' financial interests."

The announcement is the latest step in an ongoing anti-ESG push by Republican politicians in the United States, which has recently culminated in actions such as Florida passing a resolution to no longer allow ESG considerations to be used by fund managers for its $228 billion of pension funds, Texas publishing a list of fund managers – including BlackRock, Credit Suisse, UBS, and a number of others – slated for potential divestment from its pension funds, due to their strong ESG credentials, and California passing an

BlackRock has found itself at the core of many of these initiatives as the most prominent global investment management firm and a leader in the investing community on climate change and energy transition-related topics. In August, 19 Attorneys General signed a letter accusing BlackRock of having "mixed objectives" in its pursuit of anti-fossil fuel and pro-net zero agenda by pursuing a "social purpose" that was not linked with a concentration on financial returns.

In a statement from Fitzpatrick's office, the Treasurer claimed that the MOSERS board instructed BlackRock in June to abstain from voting proxies on the plan's behalf "due to concerns with their public statements and record of prioritizing ESG initiatives over shareholder return," but that BlackRock refused the request, resulting in the decision to sell the equity holdings.

In a recent letter replying to the Attorneys General's concerns, BlackRock's Head of External Affairs, Dalia Blass, noted that BlackRock allows its clients, including state pension funds, to pursue their own agendas through proxy voting. The company created the BlackRock Voting Choice initiative last year, allowing clients to apply their stewardship preferences if they choose.

Additionally, Blass noted that the company is "concerned by the rising trend of political measures that sacrifice pension plans' access to high-quality assets – so jeopardizing the financial returns of retirees."

Fitzpatrick made similar charges to the Attorneys General, asserting that certain investment managers have breached their fiduciary duties "in order to impose a failing left-wing social and political agenda on publicly traded corporations."

Fitzpatrick continued:

"It is time for all investors to acknowledge the tremendous breach of fiduciary duty occurring before our eyes and take action."

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