Documents obtained by The Dallas Express show that the City of Fort Worth stands out because it does not have any holdings in BlackRock.
Fort Worth’s public employee 457(B) Deferred Compensation Program does not invest in BlackRock. Additionally, BlackRock does not manage the programs’ assets, possibly due to the fact that the city’s 457 Plan does not have city funds invested, as there is no employee match, according to a document.
However, this also means that there is no link between employee investments and the troubled multinational investment company known for its anti-fossil fuel ESG investing.
The Teachers Insurance and Annuity Association of America (TIAA) plays the role of broker. TIAA’s role as recordkeeper involves tracking participant elections, such as deferral elections and investment directions. Since at least the mid-2010s, the investment direction has included a variety of companies and mutual funds.
One of these funds is BlackRock’s “High Yield Bond Portfolio Institutional Shares.” However, BlackRock is just one of around a dozen funds in which the Fort Worth 457b program holds assets. Moreover, the revenue shares from this fund are small compared to the larger returns produced by other funds like Invesco Diversified Dividend R5.
SB 13, also known as the Investment Protection Act, is a 2021 Texas law that forbids certain state entities from investing in, having their investments managed by, or otherwise forming a contract with any company that discriminates against Texas oil and gas producers.
After the law's passage, Texas State Comptroller Glenn Hegar identified BlackRock as one of 10 firms allegedly violating the law through ESG investing. This was based on BlackRock’s aggressive ESG strategy, which had prioritized alternative energy sources over fossil fuels as part of its Climate Action 100+ agenda. However, BlackRock has since dialed back this program. DX reported, however, BlackRock has since scaled back this program.
Afterward, BlackRock executives denied any discrimination against Texas energy producers.
“We have never turned our back on Texas oil and gas companies,” BlackRock executive Mark McCombe previously told the Financial Times.
Although the law does not apply to cities, it raises questions about how entities like the City of Houston, with its vast oil industry, choose to make investments.
Some state agencies have announced divestments from BlackRock in recent months due to SB 13. The Texas Permanent School Fund (PSF) ended ties with BlackRock in March.
“The Texas Permanent School Fund (PSF) has a fiduciary duty to protect Texas schools by safeguarding and growing the approximately $1 billion in annual oil and gas royalties managed by the Texas General Land Office,” State Board of Education chair Aaron Kinsey (R-Midland) said in a March statement announcing the sovereign wealth fund’s break with BlackRock.
Kinsey stated that the move was required and in 'full compliance with Texas law,' because the 'relationship with BlackRock was not in compliance with Texas Government Code Section 809, commonly referred to as Senate Bill 13.'
BlackRock stated that it was not informed of PSF’s decision before it was announced, but subsequent events have called the validity of that claim into question. reporting by DX has called the validity of that claim into question.
