Florida yanks $2B from ‘woke’ BlackRock over ‘social-engineering’


Florida said Thursday it has begun to divest $2 billion in funds overseen by BlackRock — a sharp rebuke of the giant asset manager’s investing policies under CEO Larry Fink that right-leaning critics have blasted as “woke capitalism.”

The divestment under Gov. Ron DeSantis – the largest of its kind by an individual state – is the latest sign of mounting unrest among Republican policymakers over so-called “ESG,” or environmental, social and corporate governance practices.

Florida’s chief financial officer, Jimmy Patronis, accused BlackRock of attempting to “use their power to influence societal outcomes.”

“Using our cash, however, to fund BlackRock’s social-engineering project isn’t something Florida ever signed up for,” Patronis said. “It’s got nothing to do with maximizing returns and is the opposite of what an asset manager is paid to do. “

BlackRock is under fire from Republicans.

“Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns,” he added.

Florida’s state treasury has removed BlackRock as manager of roughly $600 million in short-term investments and have its custody bank freeze about $1.43 billion in long-term securities. The decision was first reported by Reuters.

Florida joined other Republican-led states, including Louisiana and Missouri, who have pulled state funds from BlackRock’s control in response to concerns about ESG.

Larry Fink
BlackRock’s Larry Fink has defended “stakeholder capitalism.”
Bloomberg via Getty Images

In a statement, BlackRock said that it was “surprised” by Florida’s decision to divest.

“As a fiduciary, everything we do is with the sole goal of driving returns for our clients. We are surprised by the Florida CFO’s decision given the strong returns BlackRock has delivered to Florida taxpayers over the last five years,” the company said.

“Neither the CFO nor his staff have raised any performance concerns. We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics,” the company added.

In August, DeSantis – a frequent critic of so-called “woke” corporations – revealed that state pension funds could no longer consider ESG standards when making investments for retirees.

Florida’s three-member state Board of Administration, which is chaired by DeSantis, passed a resolution requiring fund managers to make use of state resources in a way that “prioritizes the highest return on investment” while bypassing the “ideological agenda” of ESG.

“Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity,” DeSantis said in a statement at the time.

Fink has drawn scrutiny from Republican lawmakers due to his public embrace of “stakeholder capitalism” as an investment strategy.

The BlackRock boss defended his stance in an open letter to investors last January, declaring that stakeholder capitalism is “not about politics.”

Ron DeSantis
Florida previously banned the use of ESG standards to guide state pension investments.
Getty Images

“It is not a social or ideological agenda. It is not ‘woke,’” Fink wrote in the letter. “It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”

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