Boston/Washington, March 6 (Reuters) - Frequently criticized by MAGA Republicans, asset manager BlackRock might have gained conservative approval through its acquisition of two significant ports on both coasts.
The $22.8 billion deal with Hong Kong-based CK Hutchison for these ports was highlighted in his congressional address on Tuesday night, potentially assisting BlackRock in regaining favor with Republicans.
BlackRock has faced constraints in managing retirement or treasury funds in several Republican-led states due to its environmental, social, and corporate governance (ESG) investment policies. However, some officials in conservative states are reevaluating their stance.
Indiana Treasurer Daniel Elliott, a Republican, who terminated a contract with BlackRock last year citing ESG concerns, now sees potential benefits from their collaboration with the Trump administration.
Elliott, amid positive feedback from other Republican treasurers, expressed openness to reconsidering BlackRock for future contracts if proposals were submitted. He acknowledged BlackRock's responsiveness to Republican concerns.
Texas Comptroller Glenn Hegar praised BlackRock's port investment as advantageous for Texas given its status as a top state for international trade. Despite BlackRock's refusal to divest from fossil-fuel companies, Hegar acknowledged the significance of their canal investment but clarified it is unrelated to evaluating companies listed for "boycotting."
With assets totaling $11.6 trillion, BlackRock wields substantial influence over its portfolio companies. The company briefly endorsed proposals to disclose emissions but later adjusted its approach post-2021, following the presidential election.
Gernot Wagner, a climate economist at Columbia University, believes that BlackRock's involvement in canal control could sway some of Trump's political allies. However, he notes the challenges of predicting the practical impact given the unpredictable nature of Republican leaders aligned with Trump's movement.
Although declining to comment, a BlackRock spokesperson underscored the commercial rationale of the deal in alignment with CEO Fink's statement emphasizing the pursuit of long-term partnerships.
While some Democratic pension officials prioritize climate and diversity efforts alongside maintaining fewer investment restrictions, Illinois State Treasurer Michael Frerichs emphasizes non-partisan investment practices.
Fink estimated losses of approximately $4 billion from withdrawing Republican state officials due to anti-ESG sentiments, though this represents a small portion of BlackRock's business. The company faces ongoing efforts to restore Republican confidence, notably amid legal action challenging its climate activism.
Texas Senator Ted Cruz, chairing the Commerce Committee examining the Panama Canal deal, welcomed an American entity overseeing the port facilities. Despite previous disagreements over ESG policies, Cruz affirmed a positive shift in his perception of Fink, distancing him from being labeled a "Chinese communist".
“So Fink is better?” “Unequivocally,” Cruz replied.