Late last month, 800 or so people took their seats at the Black Tie & Boots Gala, a celebration of conservative politics in deep red Texas.
The sponsor at table No. 15: BlackRock, the Republicans’ biggest target on Wall Street.
It’s no accident that the giant money manager was at the Texas Conservative Coalition Research Institute’s event, held down the street from the Texas State Capitol in Austin.
Even before Donald Trump returned to the White House, BlackRock was on the move. Its play: to soothe, and smooth, tense relations with GOP politicians across the country after being pilloried for years for talking up environmental, social and governance investing styles, or ESG.
From Indiana to Utah, West Virginia to Tennessee, BlackRock has dispatched emissaries to ingratiate itself with Republicans, who’ve lambasted the firm, as well as many of the country’s largest banks and money managers, for pressing a liberal agenda on American businesses.
It’s been five years since BlackRock CEO Larry Fink extolled the virtues of a greener planet and displacing fossil fuels in his annual missives, enraging Republicans in the process. More recently, the company has been dialing back. It’s quit climate groups and drastically reduced support for shareholder proposals designed to make corporate America greener and more diverse. And Fink no longer utters the letters ESG. These days, he prefers to talk about retirement goals rather than net-zero goals.
The push appears to be paying off, at least so far. In emailed statements, the treasurers of Texas and West Virginia praised BlackRock for its deal earlier this month to buy ports in the Panama Canal. Fink had personally contacted Trump, who praised the transaction in a prime time address to the nation as a way to shift control to American hands.
In response to questions, a BlackRock spokesperson referred to comments from Fink in January when he said “our job isn’t to be working for that left-wing organization or that right-wing organization or that spokesperson from the far right and left. Our job is to be working for each and every client, and that’s resonating with our clients.”
BlackRock held a meeting last week in Washington to discuss retirement planning, with lawmakers from both parties attending. It works with officials in Democratic-controlled states, including California. The firm also managed more than $1 trillion dedicated to sustainable and transition investment strategies as recently as September.
In Texas, where Trump loyalist Ken Paxton, the state’s attorney general, is leading a probe and lawsuit against BlackRock and other financial firms, the money manager has run social-media ads featuring cowboys, wildcatters and twangy rock ’n’ roll to showcase its oil-patch bona fides.
Only last week, Fink — the billionaire who the GOP has sought to paint as the face of a “liberal” Wall Street — was showing off a “Make Energy Great Again” wristband at an energy conference in Houston.
“They have a presence now that they didn’t have before,” said Jason Isaac, founder of the American Energy Institute, a group based just outside Austin that promotes fossil-fuel policies.
Still, no corporation wants to be a target for the politicians running Washington and many state houses across the nation. The yearslong attack has taken a toll on BlackRock, as it got swept up in investigations, blacklisted in states, and faced lawsuits and plain-old bad PR. Texas and West Virginia have restricted doing business with BlackRock, along with other firms. Indiana and Mississippi have taken legal action. Since Trump stormed back in November, loyalists have renewed their attacks on ESG broadly.
Red states have pulled at least $13 billion from BlackRock since the start of 2022, including an $8.5 billion withdrawal last year by a Texas school fund. That might sound like a lot, but it’s a pittance for the firm, which manages $11.6 trillion of assets. The company reported record revenue, operating income and net client inflows of $641 billion last year. It also has expanded in different business areas such as private markets.
BlackRock has been trying to clear the air for a while now. As the anti-ESG attacks took hold in 2022, the firm hired DCI Group, a prominent public-affairs firm, which organized meetings with center-right think tanks and BlackRock executives.
And Fink began to reach out personally: He flew to Utah, for instance, to have lunch with the state treasurer, Marlo Oaks, who once characterized ESG as part of “Satan’s plan,” according to emails obtained through a public-records request. Fink has since sent Oaks advance copies of the annual letters he sends to investors.
