On March 19, Texas State Board of Education (SBOE) Chairman Aaron Kinsey issued a statement that the Texas Permanent School Fund (PSF), one of the largest and oldest education endowments in the country with over $53 billion in assets, was moving $8.5 billion from BlackRock to other asset managers. Chairman Kinsey noted in the statement that the PSF is taking this action to comply with Senate Bill 13, which requires Texas pensions and endowments to divest their holdings from financial institutions that the Texas Comptroller has deemed are boycotting energy producers.

The action was headline news in the finance world, with coverage from BloombergFox Business, and other national outlets. When SB 13 was passed by a large and bipartisan majority in the Texas Legislature and signed into law by Texas Gov. Greg Abbott in June 2021, media coverage was scant, to say the least. But now that many other states are joining with Texas to fight back against companies that are discriminating against American energy producers, the finance world has taken notice.

The message being sent by Texas and its peers is that companies will not be able to discriminate against American energy producers without facing serious legal and economic repercussions enacted transparently through America’s democratic process.

What’s most notable about this story is the strong public reaction to it from BlackRock, which issued a statement denouncing the move. It should not be so surprising (though worthy of scorn) that a group of elected officials (the SBOE consists of 15 elected officers, and the Comptroller is also elected) is following a state law that has been in place for almost three years.

The PSF was one of the six state pensions and endowments that SB 13 specifically directs to divest from boycotting companies. The law went into effect on Sept. 1, 2021, and about a year later, Comptroller Glenn Hegar, following the statutory deadlines in the law, issued a list of companies, including BlackRock, that were deemed to be boycotting energy producers.

The PSF is not required to divest from any holdings if it deems that doing so would violate its fiduciary duty, and the PSF corporation board spent considerable time over the past year analyzing which funds it could divest from in a manner consistent with its fiduciary duty. This action is a direct consequence of the PSF carefully following the law and the intent of the Texas Legislature and not a result of “short-term politics,” as BlackRock said in its statement.

It is important to note that while SB 13 uses the term “boycott” to describe the prohibited actions, the definition is much broader than simply not investing in or doing business with energy producers. It also encompasses “taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with” fossil fuel producers. These actions might be more accurately defined as sanctioning, but the law sticks to the single term “boycotting.”

The definition precisely describes what BlackRock and its peers are doing. They invest in energy companies and then pressure them, particularly by voting against board members, to make a commitment to follow the Paris Agreement and eliminate carbon emissions, which requires producing or consuming less energy from fossil fuels. The whole agenda is designed to penalize fossil fuel producers, yet BlackRock claims it is not doing that simply because it invests hundreds of billions of dollars in those companies. Regardless of what their stated intent is, these actions are in practice discriminatory and deserving of a response from our elected leaders. If BlackRock wants to complain, it should complain that the Comptroller’s list is too small and that many of its peers are being let off the hook.

The irony of this situation is that the climate cartel of woke companies and progressive activists is criticizing states for promulgating laws and taking actions according to the processes laid out in our constitutions, while actively trying to skirt the lawmaking process to impose its agenda on America. The collusive actions to pressure companies to comply with the Net Zero agenda is worthy of the antitrust investigations currently being conducted by a coalition of more than a dozen states.

One could say that these companies and activists are being philosophically consistent by saying the laws passed by our elected legislatures shouldn’t apply to them. But Texas is saying loud and clear that no person or institution is above the law. Chairman Kinsey and the SBOE should be applauded for putting the people of Texas first by holding fast to their principles—and following the law.


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