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A stand for Mississippi’s future:...

A stand for Mississippi’s future: Secretary Watson’s bold move against ESG

By: Eric Bledsoe - April 2, 2024

Eric Bledsoe

  • Eric Bledsoe says the Magnolia State’s prosperity is intimately linked to the health of industries that are at risk of being marginalized by the ESG movement.

In an era where finance and politics increasingly intersect, Secretary of State Michael Watson has taken a commendable stand with profound implications for Mississippi. His recent order is not just an enforcement decision but a principled stand against the growing trend of environmental, social, and governance (ESG) investing, which threatens the economic well-being of the state and the foundational principles of our free economy.

What Secretary Watson’s Order Means

Secretary Watson’s order directly challenges the practice of ESG investing, which has been gaining traction among major financial entities, including BlackRock. By explicitly addressing the concerns that ESG criteria might prioritize political agendas over financial returns, the order seeks to ensure that BlackRock and asset managers like it stop using Mississippians’ investments, like retirement funds, as a political tool rather and instead prioritize financial returns and the welfare of Mississippi’s citizens.

The order makes several key points:

  • Cease and Desist Order: The order imposes a cease and desist on BlackRock’s false and misleading statements regarding its investment funds. Mississippi states BlackRock’s claim that its non-ESG funds do not use nonfinancial criteria is untrue as BlackRock has committed to use all assets under management to achieve net-zero carbon emissions. The order also asserts that BlackRock’s claim that its ESG funds drive financial returns is untrue and misleading to investors.
  • Administrative Penalty: The order also imposes a penalty on BlackRock for its false and misleading statements regarding its non-ESG and ESG funds. Under Mississippi law, investment managers are prohibited from making untrue statements of material facts regarding the sale or offer of securities. For each infraction, violators can be fined up to $25,000 in penalties.

Understanding Secretary Watson’s order requires recognizing the broader national movement towards ESG investing and BlackRock’s influential position in this trend. ESG investing aims to integrate environmental, social, and governance factors into investment decisions. However, this approach sidelines traditional industries essential for Mississippi’s economy and the nation’s energy independence in favor of political goals.

BlackRock, a global financial behemoth advocating for ESG principles, plays a pivotal role in shaping this investment landscape. Its decisions significantly influence the availability of capital for industries deemed unfavorable by ESG criteria, potentially affecting jobs, economic growth, and energy security in states like Mississippi.

Why Mississippi Voters Should Care

This issue transcends complex financial discussions, touching the core of Mississippi’s economic stability and the livelihoods of its citizens. The state’s prosperity is intimately linked to the health of industries that are at risk of being marginalized by the ESG movement. Secretary Watson’s proactive measures aim to shield these sectors, ensuring that economic policies are driven by the needs and interests of Mississippians rather than the whims of distant investment managers.

Moreover, by understanding these dynamics, voters are better positioned to make informed choices about our state’s future direction. This knowledge empowers us to advocate for policies that prioritize our economic interests, championing a future where enterprise thrives free from external political influence.

Secretary Watson’s stance is a testament to Mississippi’s commitment to economic sovereignty and the principles of free enterprise. It serves as a reminder that, despite national trends, Mississippi prioritizes policies that foster prosperity, independence, and the well-being of its citizens.

It’s crucial that Americans grasp the significance of the battle between political activism and fiduciary duty. Leaders must support initiatives that safeguard our economic interests, and ensure our voices contribute to shaping economic policy. Secretary Watson’s order is not merely a policy statement; it’s a bold declaration of the state’s values and a commitment to securing a prosperous future for Mississippi.

About the Author(s)
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Eric Bledsoe

Eric Bledsoe is a Senior Fellow at the Foundation for Government Accountability where he advances state and federal policy solutions.