BATON ROUGE, LA – Louisiana
Attorney General Jeff Landry has issued legal guidance to
Legislative leadership and the State retirement boards after a preliminary
investigation showed that investment firms BlackRock, Vanguard, and State
Street may have violated its fiduciary duty of loyalty owed to their
investor-clients in Louisiana. This guidance comes just weeks after Attorney
General Landry, along with 17 other state attorneys general, launched an
investigation into Environmental, Social, and Governance (ESG) ratings company
Morningstar.
“Policy is made in our Legislative Branch, not woke corporate boardrooms,” said
Attorney General Landry. “The Big Three have a responsibility to invest with
their client's best interests in mind rather than their own agenda on climate
change, politics, and other self-interests.”
Attorney General Landry argues
that investment firms that operate as investment advisors in Louisiana and
utilize ESG factors without full disclosure to their investor-clients are
likely in violation of their fiduciary duties imposed by Louisiana law. In
Louisiana, those investor-clients include entities such as the Louisiana
Treasury and Louisiana State Retirement Boards – including the Louisiana State
Employees Retirement System.
The Attorney General’s legal
guidance states that The Big Three (BlackRock, Vanguard, and State
Street) have "violated their fiduciary duty by, among other things,
pledging together as part of Climate Action 100+, and, thus, have placed their
interest in the ESG agenda above the interest of their investor-clients."
A further example of the violation of their fiduciary duty is provided in the
fact that BlackRock is imposing the ESG agenda on Exxon but not on PetroChina.
“Whether it is big banks
infringing on our Second Amendment rights or corporate elites attacking our
energy production, these encroachments could greatly impact our way of life in
Louisiana," concluded Attorney General Landry. "So my office and I
will continue fighting to ensure entities doing business with our State and her
people follow the law and prioritize Louisiana’s best interests.”
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Earlier this year, Attorney General Landry wrote
the Louisiana Treasurer a letter calling on Mr. Schroder to no longer invest
with BlackRock Inc. A copy of that correspondence may be found at https://www.agjefflandry.com/Files/Shared/Documents/2022.01.18-LtrtoTreasurerSchroder.pdf.