BlackRock tells Texas it supports investments in oil and gas

NEW YORK/DALLAS (May 19): BlackRock Inc told Texas it’s committed to helping clients invest in the energy industry, rebutting suggestions by state officials that the firm boycotts fossil-fuel companies through its advocacy for sustainable investing.

The world’s largest asset manager oversees about US$310 billion of investments in energy firms worldwide, including more than US$115 billion in Texas companies, BlackRock said in a letter to state Comptroller Glenn Hegar.

“We do not boycott energy companies,” BlackRock’s Dalia Blass, head of external affairs, and Chief Client Officer Mark McCombe wrote in the May 13 letter, obtained through a public-records request. “On behalf of our clients, we are invested in industries and in communities across Texas.”

A spokesman for New York-based BlackRock declined to comment beyond the contents of the letter.

BlackRock, with US$9.6 trillion under management as of March 31, said its business model is to offer a wide range of investment funds and that it doesn’t dictate particular strategies that its clients must use. More than half of BlackRock’s US retail funds allocate some of their portfolios to energy companies, according to the letter.

BlackRock funds own 6.5% of Irving, Texas-based Exxon Mobil Corp and 8.3% of Houston-based ConocoPhillips, according to Bloomberg data as of March 31. It’s the second-biggest investor in both companies.

Some clients choose funds that specifically exclude fossil fuels, and the firm has created seven US retail funds for this purpose, BlackRock said. These funds account for about 0.1% of US retail assets under management. Additional funds restrict certain types of energy or fossil fuel investments or prioritize companies that are advancing the world’s transition to cleaner energy.

The letter came in response to a March request from Hegar for detailed information from BlackRock and 18 other financial firms about their climate policies and energy investments.

A Texas law that took effect last year is designed to limit state business with companies that restrict investment in the oil and gas industry. Hegar is in the process of devising a list of those deemed to be boycotting the sector.