BlackRock CEO Fink woos Texas after ESG spat

By Isla Binnie

(Reuters) – BlackRock Chief Executive Larry Fink sought to build rapport with Republican officials at an energy investment summit in Houston on Tuesday after Texas blacklisted the asset manager over moves to transition away from fossil fuels.

Texas has been at the forefront of politically “red” states restricting their public pension funds from doing business with BlackRock and other Wall Street firms that have embraced environmental, social and corporate governance (ESG) principles.

State Lieutenant Governor Dan Patrick said last month that Fink reached out to him after the state blacklisted BlackRock, and that the two had met twice, with the latest meeting yielding the idea to hold the summit.

According to a script of prepared remarks, Fink told the summit on Tuesday that BlackRock could help Texas get $10 billion in private investment to strengthen its power grid, after bouts of extreme weather over the last few years, from heat waves to winter storms, left millions without electricity and heat.

“That’s actually what sparked the idea for this summit. I told the Lieutenant Governor about some of the work we’d done,” Fink said referring to BlackRock’s bid to raise capital for Maui’s power grid following last year’s devastating wild fires in Hawaii.

Fink said more than 100 investors who collectively manage about $2.2 trillion attended the summit, and that he expected them to help bolster Texas’ energy system.

Patrick’s office did not respond to requests for comment.

BlackRock has a major infrastructure investing division, which it said last month it would expand by acquiring private equity firm Global Infrastructure Partners (GIP) for $12.5 billion. BlackRock has invested more than $1.2 billion in Texas energy, including renewable energy and natural gas.

Through its mutual and other funds, BlackRock also has $125 billion invested in Texas-based publicly listed energy companies.

Fink said last year he stopped using the term ESG, which encompasses a range of ethically responsible business practices, from curbing carbon emissions to cracking down on discrimination in the workplace, because it has been politically weaponized.

BlackRock still runs some ESG-focused funds and has said it continues to talk to companies it has stakes in about decarbonization, corporate governance and pressing social issues.

Fink told the summit he had visited the site of the world’s largest air carbon capture facility in the Permian Basin the day before, which BlackRock is developing together with Occidental Petroleum.

(Reporting by Isla Binnie in New York; Editing by Lincoln Feast.)