Could investment company BlackRock eventually be removed from a list of firms banned from doing Oklahoma state business because of its previous discrimination of oil and gas companies?
It’s a question posed to the Oklahoma Treasurer’s office after OK Energy Today recently reported how the New York-based investment firm disclosed its ownership in several Oklahoma energy companies—yet it still remained on the state’s banned list under implementation of the Oklahoma Energy Discrimination Elimination Act.
OK Energy Today reported that filings with the U.S. Securities and Exchange Commission showed BlackRock owned 8.6% or 11,227,586 shares in Chesapeake Energy, 13.9% or 3.9 million shares in Tulsa’s Vital Energy, 9% or more than 48 million shares in ONEOK, 14.5%ormore than 8 million shares in ONE Gas, parent company of Oklahoma Natural Gas Co., and 12.4% or 24.9 million shares in Oklahoma Gas & Electric Co.
Reporter Mike Ray with the Southwest Ledger took the information to the Oklahoma Treasurer’s office, asking why BlackRock continued to be banned even with its significant ownership of shares in the handful of Oklahoma energy companies.
Here’s what he learned.
Jordan Harvey, the treasurer’s chief of staff, noted that BlackRock is one of more than 315 signatories to the Net Zero Asset Managers initiative launched in December 2020. The international group has $57 trillion in assets under management.
“They all agree to support the goal of net zero greenhouse gas emissions by 2050 or sooner,” she said. “If you read their reports
over the last three years, their intent is to divest from the fossil fuel industry” and thereby starve it of operating cash.
Alliance members commit to “work in partnership with asset owner clients on decarbonization goals, consistent with an ambition to reach net zero emissions by 2050 or sooner across all assets under management.”
BlackRock’s shareholder reports “align them with this net zero alliance,” Harvey said.
“Their entire purpose is compliance with the Paris climate accord of 2015.”
A major goal of that accord is to substantially reduce global greenhouse gas emissions, to limit the global temperature increase to well below 2° Centigrade above pre-industrial levels and to pursue efforts to limit it to 1.5° Centigrade, and thereby
reduce the effects of climate change.
BlackRock is “buying shares to give them a seat at the table,” Harvey said. “This gives them a bigger stick to talk with, or divesting if BlackRock wants to use their nine trillion dollars of influence to encourage other organizations to divest from the fossil fuel industry.”
“If financial companies that are on the state’s blacklist “want to reverse course, Treasurer Russ is constantly evaluating their actions and behavior,” Harvey said.
For example, Vanguard “pulled out of the alliance,” she said. Companies on the state’s blacklist have an opportunity to clarify their activities, and a step-down period is in place before complete divestiture is required. The law does not apply to indirect holdings in actively or passively managed investment
funds or private equity funds, or if a sale would result in a financial loss for the state.
The treasurer is required by law to update the list annually but not more often than quarterly. Russ’ next deadline is this
May.