Silver State Times

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

A consumer group Consumers' Research wrote a letter to Nevada Gov. Steve Sisolak on Dec. 2 warning him of the risks of investing state funds into BlackRock because of its relations with China, according to The Daily Signal. Nevada has the fourth most amount of money out of any state pension fund invested with BlackRock with approximately $9.7 billion invested in the company. 

The letter from Consumers' Research argued that investing in BlackRock puts the security and finances of the public at risk, and particularly highlighted state-run pension plans tied up in BlackRock investments. The same letter was addressed to the governors of Washington, South Carolina, Florida, Oklahoma, New York, Pennsylvania, Montana, Nebraska and West Virginia — the top 10 states with state pension funds invested in BlackRock.

"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) surveillance and intelligence gathering apparatus, or worse yet, make them party to human rights abuses like the ongoing genocide against Uyghurs in Xinjiang, China."

BlackRock Chairman and CEO Larry Fink recently wrote a letter to the heads of the companies in which BlackRock invests, The Wall Street Journal reported. It stated 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. "And 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 said. "... 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 alleged discrimination against 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 State Treasurer Riley Moore announced that the Board of Treasury Investments, which manages the state's $8 billion in operating funds, would no longer use BlackRock. The firm's embrace of "net zero" investments harm the coal, oil and natural gas industries, of which West Virginia heavily relies on.

Moore also said that BlackRock had been increasingly investing in Chinese companies engaging in conduct that ran 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 Sovereign Wealth Fund Institute's transaction data. Competitors in the space include State Street, Northern Trust, Invesco, Vanguard and Wellington Management Co.