Empire State Today

Concerns are growing about money management firm BlackRock because of its business involvement in China. 

Consumers' Research wrote a letter in December to New York Gov. Kathy Hochul, warning of the risks of investing state funds into BlackRock because of its relations with China. New York currently has approximately $9.8 billion from the state pension fund invested in the company.

"BlackRock has maintained a bullish approach to investing billions in Chinese firms, supporting their economy, and helping fuel the rise of their military, which barely a month ago tested a hypersonic missile," Consumers' Research Executive Director William Hild wrote in the letter. "Investment in Chinese companies could also make U.S. investors unwitting accomplices in the expansion of the [Chinese Communist Party's] CCP’s surveillance and intelligence gathering apparatus, or worse yet, make them party to human rights abuses like the ongoing genocide against Uyghurs in Xinjiang, China."

The letter argued that investing in BlackRock puts the security and finances of the public at risk, and particularly highlighted state-run pension plans tied up with BlackRock. 

The same letter also was addressed to the governors of Washington, South Carolina, Florida, Oklahoma, Nevada, Pennsylvania, Montana, Nebraska and West Virginia, the top 10 states with state pension funds invested in BlackRock.

The Wall Street Journal reported that BlackRock Chairman and CEO Larry Fink recently wrote a letter to the heads of the companies in which BlackRock invests, stating that those not planning for a carbon-free future risk being left behind and that it was a focus of BlackRock to help lead the transition to "net-zero."

"Divesting from entire sectors, or simply passing carbon-intensive assets from public markets to private markets, will not get the world to net zero," Fink wrote in his letter. He went on to say that "BlackRock does not pursue divestment from oil and gas companies as a policy."

"Any plan that focuses solely on limiting supply and fails to address demand for hydrocarbons will drive up energy prices," Fink wrote. "We need to be honest about the fact that green products often come at a higher cost." 

However, BlackRock has been engaging in investing in clean energy and, more broadly, environment, social and governance issues, according to Real Clear Energy.

Some states have begun to take action against companies that boycott energy companies. 

Texas, for example, has cited BlackRock's divestment in the oil and gas industry as a reason for divesting the state's pension funds. 

"As you prepare the official list of companies that boycott energy companies, I ask that you include BlackRock, and any company like them, that choose to hurt Texas oil and gas energy companies by boycotting them in violation of Senate Bill 13," Texas Lt. Gov. Dan Patrick wrote a letter to the state's comptroller. "BlackRock is capriciously discriminating against the oil and gas industry by exiting investments solely because companies do not subscribe to a 'net zero' policy beyond what is required by law."

The Sovereign Wealth Fund Institute reported that on Jan. 17, West Virginia Treasurer Riley Moore announced that the Board of Treasury Investments, which manages the state's $8 billion in operating funds, will no longer use BlackRock in response to recent reports that BlackRock was urging companies to embrace "net zero" investments. It noted that BlackRock's policies would harm the coal, oil and natural gas industries, of which West Virginia heavily relies.

Moore also noted that BlackRock had been increasingly investing in Chinese companies engaging in conduct that run counter to the interests of the United States and would damage the manufacturing industry and job market in West Virginia. Moore highlighted significant financial risks associated with firms that invest heavily in China.

Many U.S. public pension funds use BlackRock's investment products, according to SWFI fund transaction data. Competitors include State Street, Northern Trust, Invesco, Vanguard and Wellington Management Co.