BlackRock Removed from Indiana Pension Fund Management Over ESG Commitment

The Indiana Public Retirement System (INPRS) has decided to remove BlackRock as its portfolio manager, citing the company’s use of ESG investing policies and commitment to ESG-focused programs .

BlackRock currently manages a passive mandate for INPRS linked to an index of international sovereign bonds, with assets approaching $1 billion

The announcement is part of a series of initiatives by the anti-ESG movement, which is gaining traction among some political factions in the United States. BlackRock, as a leading global investment management firm and an influential voice in the financial community on issues related to the energy transition and climate change, often appears at the center of this criticism.

Recently, BlackRock, along with Vanguard and State Street, was involved in a multistate lawsuit, with Indiana participating, that accuses the fund managers of using their position in green investing initiatives to manipulate carbon markets and raise energy costs.

BlackRock responded to criticism of its choices by clarifying that the index management mandate for INPRS had no ESG components or filters

The INPRS board’s decision comes after a report found that BlackRock has made an “ESG commitment,” citing its membership in the Net Zero Asset Management (NZAM) initiative. BlackRock responded to criticism of its choices by clarifying that the index management mandate for INPRS had no ESG components or filters. Additionally, Indiana passed a 2023 law banning the use of ESG factors in public pension system investment decisions.

With its vote, the INPRS board confirmed that there are other fund managers equivalent to BlackRock, capable of managing the portfolio of bonds linked to global inflation , and gave a mandate to INPRS to choose a new manager for this portfolio.

BlackRock, despite the decision, had reduced its involvement in sustainability initiatives, such as recently shifting its involvement in the Climate Action 100+ coalition to its international division, citing a new CA100+ strategy, which requires signatories to use client assets to drive emissions reductions at portfolio companies.

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(Featured image by Photo Boards via Unsplash)

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