Mississippi’s Republican Secretary of State Michael Watson has just hit investment giant BlackRock with a cease and desist order over the company’s “fraudulent” claims about “environmental, social, and governance” (ESG) investing.
Watson sent a cease and desist letter to BlackRock on Tuesday night.
The state SOS is accusing the company of misleading clients about its involvement in ESG investing.
The letter accuses BlackRock of incorporating ESG factors into its investment funds that are designated as non-ESG.
Watson says this is due to BlackRock’s broader commitment to have all assets under management advance the agenda of reducing “carbon emissions” to comply with the “Net Zero” targets of the World Economic Forum (WEF).
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.
Watson says the order seeks to prevent “immediate and irreparable public harm.”
In a statement about the move, Watson said:
“Investment companies will not push their political agenda on Mississippians, especially through fraudulent and deceptive means.
“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 accuses BlackRock of misleading customers about its ESG funds by claiming that the globalist criteria 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.
Mississippi's Sec. of State has sent a Cease & Desist to @BlackRock — alleging fraud in the woke asset manager's marketing materials, claiming to focus on returns but instead pushing ESG.
The letter orders $BLK to stop misleading investors or cease marketing funds in the state. https://t.co/ZjJrpdZY4R
— Will Hild (@WillHild) March 27, 2024
In a statement responding to Watson’s letter, BlackRock insists that it is only acting in the “best financial interests” of its clients.
“Many policymakers and government officials have ideas on how we should invest our clients’ assets,” BlackRock said.
“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.”
In its “2030 Net Zero statement,” BlackRock argues that transitioning to zero emissions by 2050 would benefit the economy as a whole.
In turn, the company claims its clients would also benefit due to the supposed consequences of not reducing emissions.
Other public entities have also moved to take action against ESG investing.
Texas schools recently pulled an $8.5 billion pension fund from BlackRock.
Florida also 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.
In December, House Judiciary Committee Chairman Jim Jordan (R-OH) issued several subpoenas 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+.
BlackRock exited its domestic business from the scheme earlier this year but has remained involved with its international arm.
