Second, both Mr. Landry’s and Mr. Rokita’s letters are warnings to public pension-plan trustees, who are under the same fiduciary duties that BlackRock is. Mr. Rokita’s opinion concludes that public pension boards are “prohibited” from retaining asset managers who “make investments, set investment strategies, engage with portfolio companies, or exercise voting rights appurtenant to investments based on ESG considerations,” which the Big Three all do.
This conclusion is logical. If BlackRock is violating its fiduciary duty, so is a pension-plan board member or investment staffer who knowingly invests with BlackRock. It’s well-settled law, as the Second Circuit Court of Appeals has stated, that where a “fiduciary was aware of a risk to the fund . . . he may be held liable for failing to investigate” or for not “protecting the fund from that risk.”
‘Enforcement 40’ for 2020
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