Florida Divests $2 Billion From BlackRock Because Of DeSantis’s ‘Anti-Woke’ Investment Rule

Florida’s Chief Financial Officer Jimmy Patronis announced last week that the state was pulling about US$2 billion in investments from asset management company BlackRock Inc (NYSE: BLK) due to the asset manager’s strengthening Environment, Social and Governance (ESG) standards.

The state’s custody bank will be freezing $1.43 billion in long-term securities currently with BlackRock, and remove the company as manager of about $600 million of short-term overnight investments. The state’s treasury intends to reallocate the assets to other managers at the start of 2023.

While Florida’s divestment will hardly be felt by BlackRock with its $8 trillion in assets, the move highlights the growing backlash against ESG investing, with many Republican leaders, like Florida’s DeSantis, saying it puts politics over investor interests.

In January, BlackRock CEO Larry Fink released an open letter where he discussed the company’s support for “stakeholder capitalism,” where the company becomes more conscious about choosing clients that “create value for and be valued by its full range of stakeholders .” 

“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke,’” Fink wrote. “It is capitalism, driven by mutually beneficial relationships between you and the employees, customers, suppliers, and communities your company relies on to prosper. This is the power of capitalism.”

But Florida’s treasury division — which echoes Governor Ron DeSantis, who in August pushed a resolution calling for the state to halt its ESG investments because he believed it peddled what he calls “ideological agenda” — called BlackRock’s preference for ESG “undemocratic.”

“Whether stakeholder capitalism, or ESG standards, are being pushed by BlackRock for ideological reasons, or to develop social credit ratings, the effect is to avoid dealing with the messiness of democracy. I think it’s undemocratic of major asset managers to use their power to influence societal outcomes,” Patronis wrote in his statement.

“If Larry, or his friends on Wall Street, want to change the world – run for office. Start a non-profit. Donate to the causes you care about,” the CFO wrote, adding that “Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns.”

Patronis also noted that he doesn’t “trust BlackRock’s ability to deliver,” but did not mention any instances of performance concerns.

In a report by Reuters, BlackRock expressed its concerns over Florida’s decision. 

“We are disturbed by the emerging trend of political initiatives like this that sacrifice access to high-quality investments and thereby jeopardize returns, which will ultimately hurt Florida’s citizens. Fiduciaries should always value performance over politics.”

READ: New Anti-Woke ETF Launches On Wall Street, Already Focuses On “Progressive” Issues

The asset manager has emphasized that their efforts to support ESG is aimed at improving company performance, it has resisted calls for steps like divesting from oil companies, which have prompted some criticism from Democratic officials, saying BlackRock doesn’t push ESG concerns enough.


Information for this briefing was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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