BlackRock is ramping up spending on US lobbying in the face of attacks against ESG

BlackRock sharply increased its lobbying spending in the US last year as the world’s largest asset manager came under attack for its use of environmental, social and governance (ESG) factors in investing.

BlackRock disclosed spending $2.38 million in 2022 on federal lobbyists, up 63 percent from 2021. Within that, it more than doubled the amount of money it paid high-powered lobbyists to $1.2 million.

State lobbying records show the company also added five registered lobbyists in Texas and two in Florida, up from none in either state in 2020.

Republican politicians in those states are leading the charge on investment groups they view as hostile to fossil fuels. Congress is expected to take over now that Republicans have taken control of the House of Representatives.

Texas declared BlackRock hostile to fossil fuels and earmarked it for divestment. Florida treasurer last year withdrew $ 2 billion from it Black stone More than ESG, although government pension funds still use the money manager.

BlackRock said in a statement that it “works with US policymakers to ensure that investors’ voices are heard when considering critical issues such as retirement insurance and market structure and protecting investors’ freedom to choose financial products that best suit their individual needs and goals.” .

Spending by money managers on lobbying tends to rise and fall depending on the issues under discussion in Washington, with big peaks around bills focused on taxes, retirement accounts, and securities regulation. Last year, Congress passed amendments to the rules for employer-sponsored retirement plans and held hearings on the regulation of securities and index funds as well as a growing focus on climate investing.

It tracks BlackRock’s spending on lobbyists Fidelity and Invesco, which have been among the main users of federal lobbying among asset managers in recent years. Fidelity disclosed $2.4 million in spending in 2022, up 10 percent, and Invesco reported $4.92 million, up 21 percent. Asset managers generally lag national leaders, including Amazon, Meta and Pfizer, according to the Open Secrets website.

State Street, which was defamed along with BlackRock in a December hearing by Texas lawmakers Invest in ESG, significantly increased its spending in 2022, from $1.08 million to $1.76 million. The group, which includes a bank and an asset manager, noted that its spending in 2020 was similar to 2022, and said the decline was related to the timing of a large annual payment. He declined to comment further.

Vanguard, a rival index fund provider, slashed its reported federal lobbying spending in 2022, dropping 14 percent to $1.82 million, but went from zero lobbyists in Texas in 2021 to two last year. Vanguard has been excused from a hearing against ESG in Texas after it announced it was withdrawing from a major global climate coalition, Net Zero Asset Managers’ initiative.

The asset management industry continues to work bipartisanly in Congress to advance laws that put investors’ long-term interests first. Recent priorities have included tax policies that encourage saving and investment, bipartisan retirement legislation “Secure 2.0” and bills that focus on the Saudi Electricity Company’s core missions of capital formation, investor protection, and regulated markets.

ICI’s lobbying spending fell 15 percent to $4.58 million in 2022, which was attributed to retirements and changes to its contracts with outside firms.

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