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(Reuters) -A BlackRock Inc (NYSE:BLK) executive and Texas state senators sparred over the firm’s membership in an investment group aiming to limit climate change at a hearing on Thursday.
Republicans at the hearing, which was webcast, questioned if BlackRock’s membership in the Climate Action 100+ committed it to putting too much pressure on portfolio companies to take steps to reduce emissions.
BlackRock Senior Managing Director Dalia Blass said the firm had maintained its independence within the group. “We have one bias, and that’s to get the best risk-adjusted returns for our clients,” Blass said.
The hearing held in Marshall, Texas by the Texas Senate’s Committee on State Affairs marked a rare face-off between financial executives and some of the Republican politicians who have objected to investors’ increasing use of environmental, social and governance (ESG) factors in selecting holdings.
BlackRock in particular has been singled out by the state for overly pressuring its important energy sector under the terms of a new state law designed to protect fossil fuel companies, a designation that could cost it state pension contracts.
A number of State Street Corp (NYSE:STT) funds were also designated. Lori Heinel, global chief investment officer for State Street’s asset management arm said in prepared remarks that “We are obligated to act as a fiduciary for our clients, and that duty is the basis for our approach to ESG.”
