“When do the human rights tribunals begin for . . . Larry Fink?” Jason Isaac asks the standing-room-only audience at the Texas Public Policy Foundation’s annual summit.
Isaac, who’s the director of the conservative think tank’s Life:Powered initiative, which evangelizes that greater access to fossil fuels will solve world poverty, is holding court during a panel titled “ESG = Everyone’s Suffering Guaranteed” and singling out the chairman and CEO of $10 trillion asset manager, BlackRock. For years, Fink and his company have encouraged businesses to embrace a “sense of purpose” beyond making money for shareholders, and to consider how climate change could affect their potential for growth, in the belief it’ll help BlackRock’s millions of customers accumulate wealth for retirement. But to Isaac, “the policies they’re pushing are pushing us back into poverty, and crushing the least among us more than anyone else.” Heads nod approvingly at the prospect of Fink being punished as an “enemy of the state.”
The session, held in early March in a conference center in Austin, showcases how Texas is leading the conservative pushback against environmental, social, and governance (ESG) investing, the progressive investment philosophy that has risen to prominence in the last decade. As the most influential ESG proponent in finance, BlackRock bears the brunt of these Texans’ ire. Isaac shares the story of how he excoriated several BlackRock executives who visited his offices, taking them to task for backing the UN’s recommendation to phase out fossil fuels. That won’t mitigate climate change, he recalls warning them, “but does everything to increase the cost of energy. And expensive energy hurts the poor.” After the panel, Isaac tells me that his goal is to defeat “this cartel that is colluding to influence companies outside of the democratic process.”
Isaac helped draft the 2021 Texas law that led the state to create a list of financial companies—mostly European banks but also BlackRock—that boycott “certain” energy businesses. Any governmental entity, including state pension funds, must divest from them if they don’t change their policies. The law never mentions ESG, but it puts banks and asset managers that consider those principles in any of their financial products on notice. Isaac and his fellow panelist, Republican state Senator Bryan Hughes—who’s been called the Ted Lasso of the statehouse for his always smiling demeanor—aren’t done. They preview what they call a “fiduciary duty bill” that Hughes introduces later in March. The bill would prohibit officials managing public pension funds from investing “with a purpose of furthering social, political, or ideological interests.” The broader scope of the legislation reflects their intent to hunt down every aspect of how the financial industry has been promoting ideals beyond maximizing shareholder value—and eliminate them.
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