Oklahoma blacklists BlackRock, major banks over ESG practices

The state of Oklahoma on Wednesday unveiled a list of financial institutions it had determined to be boycotting the state's energy industry, indicating it would divest state assets from those firms.

Treasurer Todd Russ announced the 13 institutions after sending a a questionnaire to numerous companies in the state regarding their practices, pursuant to state law. Companies that make the list may either reverse their practices and cease boycotting the state's energy industry, or face a mandatory divestment of state funds from their organizations.

Among those firms the state considers to be boycotting its energy industry are asset managers BlackRock and State Street, as well as major banks Wells Fargo and Co, JPMorgan Chase & Co, and Bank of America Corporation. 

Grosvenor Capital Management, Lexington Partners, FirstMark Fund Partners, LLC, Touchstone VC Global Partners, WCM Investment Management, William Blair, Actis LLP, and Climate First Bank rounded out the list.

"The energy sector is crucial to Oklahoma’s economy, providing jobs for our residents and helping drive economic growth," Russ said in a press release. "It is essential for us to work with financial institutions that are focused on free-market principles and not beholden to social goals that override their fiduciary duties."

Russ later told Just the News that the divestment would involve the decoupling of billions in state funds from these firms. He pointed to the state pension fund for public employees, which he said included $10 billion in assets of which BlackRock manages "roughly 60%." He further identified the $20 billion teacher retirement fund as major account of which State Street holds a significant portion.

The state treasurer suggested some firms may reverse their policies in the face of divestment. He further indicated that representatives of the firms were attempting to reach him, saying "I know they’re trying to communicate with my office and they’re anxious to visit with me."

He did, however, indicate that such meetings were unlikely to convince him to change course, indicating that he had previously heard the firms' arguments and was more likely to be moved by direct action.

"Don't tell me, show me," he said.

The move is the latest volley from Republicans in an ongoing battle over Environmental, Social, and Corporate Governance (ESG) practices in the financial sector that aim to use the weight of major institutions to advance those initiatives. Critics argue that the practices, particularly with respect to asset managers, may potentially constitute breaches of a firm's fiduciary duties.

Numerous states, such as Kentucky and Florida, have barred ESG investing practices by those firms managing public funds and numerous others are mulling comparable policies.

Ben Whedon is an editor and reporter for Just the News. Follow him on Twitter.