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What E.S.G. really means

BlackRock wants to clear the air on “woke” investing.

Yesterday, the world’s largest money manager published a letter pushing back on one it received last month from 19 Republican state attorneys general who accused BlackRock of putting its “climate agenda” ahead of clients, collaborating with climate activists and boycotting energy companies. Tensions between BlackRock and Texas in particular came to a head last month when the state accused BlackRock of boycotting energy companies, violating a 2021 law that aims to protect the energy industry from the growing popularity of climate-minded investing. As a result, BlackRock could be blackballed from managing the billions in retirement funds of Texas government employees.

BlackRock says it’s looking to correct “misconceptions” and “inaccurate statements” about its climate position. In its letter, BlackRock says that the firm has never dictated specific emission targets to any company, and that it doesn’t coordinate its investment decisions or shareholder votes with others on climate issues, as the attorneys general claimed. Far from boycotting, BlackRock says it has invested “hundreds of billions of dollars” in energy companies.

The firm is following a broad trend of policymakers and research when it comes to climate issues, BlackRock says. “Your letter makes several inaccurate statements about BlackRock’s motive for participating in various ESG-related initiatives,” BlackRock writes in the letter, which is signed by the firm’s head of external affairs, Dalia Blass. (E.S.G., or environmental, social and governance, is the latest term for socially conscious investing.) Instead, BlackRock says its shareholder votes and investment decisions reflect that, generally, its investment professionals believe that climate change poses real risks and opportunities for investors. The firm’s belief is “by no means unique,” BlackRock writes.