BlackRock sent a 10-page letter to the Republican AGs about ESG. As predicted, it is diplomatic, speaking in terms of “welcoming” the opportunity to “clarify” its positions. But it in no way backs down. The full letter is below, and here are some of the highlights. [footnotes omitted and emphasis added]

Your letter makes several inaccurate statements about BlackRock’s motive for participating in various ESG-related initiatives. In managing our clients’ assets, BlackRock seeks to realize the best long-term financial results consistent with each client’s investment guidelines. Our participation in these initiatives is entirely consistent with our fiduciary obligations. Governments representing over 90% of global GDP have committed to move to net-zero in the coming decades. We believe investors and compa- nies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes. These opportunities cut across the political spectrum; nota- bly, as Bloomberg recently reported, Republican districts are well ahead of their Democratic counterparts in advancing clean-energy projects and deploying clean-energy technology.

Climate risk and the economic opportunities from the energy transition have become a top concern for many of our clients. BlackRock clients representing more than $3.3 trillion in assets have committed to support that transition through investments in their portfolios. Our role is to offer them data and analytics, investment insights, and thought leadership about the impacts of the energy transition on their portfolios. Contrary to the claim in your letter, we do not “assume that the Paris Agreement will be implemented within the United States, and by all of its signatories, on time and in full by 2050.” Rather, as we have previously stated, the speed and shape of this transition are unclear. What is clear, on the other hand, is that there are investment risks and opportunities associated with a transition to a low-carbon economy. As the recent historic floods across the country as well as the droughts and wildfires throughout the West and around the world this past year have shown, climate change is testing the resilience of many industries and businesses...

BlackRock’s views on the investment risks and opportunities posed by climate change and the low-carbon transition are by no means unique. As recently noted in a comment letter many of you submitted to the SEC on August 16, 2022, adoption of voluntary frameworks regarding ESG has accelerated in recent years, and such frameworks are now widespread. In 2020, 92% of the S&P 500® and 70% of the Russell 1000® published sustainability reports. We also understand, however, that these views are not universal. For this reason, we offer clients a broad choice of investment products that are designed to help them meet their varied goals, priorities, and risk tolerances.…

[Y]our letter suggests that voting against management on climate-related issues could fit within certain states’ statutory definitions of boycotting because it may constitute “an action to penalize” an issuer for “failing to meet emissions standards beyond what is required by law.” But our votes are not cast to “penalize” companies. Quite the opposite: our votes are cast with a view to achieving the best long-term value for those companies and their shareholders.