Companies. The State Treasurer of Louisiana (United States), John M. Schroder, announced on Wednesday October 5 that he was withdrawing all his public investments – i.e. nearly 800 million dollars (approximately 815 million euros) – from the BlackRock investment fund, one of the largest in the financial market.
The reason given: BlackRock’s commitment to only support carbon-neutral and fossil fuel-free projects. But this decision against the current does not stem from a claimed climatoscepticism. In a letter made public (available online), the State Treasurer strongly refers to company law and the shareholder doctrine which they see as a pillar of democracy.
He first notes that the citizens of Louisiana, who are the holders of these funds, work “harshly” to an economy based on fossil fuels. However, BlackRock’s policy aims to dismantle it. He then recalls that under Louisiana corporate law, company directors are bound by their “fiduciary duties”that is to say by their obligation to take into account only the interests of their shareholders, or to give them priority over any other consideration.
Damage to interests and rights
He adds, finally, that in a democracy everyone is free to defend their own values and cannot have them dictated by a business leader. Thus, BlackRock’s climate commitment undermines the interests and rights of the citizens of Louisiana, which justifies the total withdrawal of the funds for which it is responsible.
BlackRock did not fail to react to this decision, but its response avoids the legal field and retains that of rationality: the fund expresses the “Regret that Louisiana deprives its citizens of the only long-term performing investments that guarantee their well-being”.
This confrontation underlines the danger induced by the company’s shareholder model in the face of climate peril. Because, beyond the idea that the interests of the shareholders must be defended as a priority, this model assumes that the latter can also rationally judge their short and long-term interests, and that ultimately, this freedom is of essence democratic.
Legal prerogatives
From then on, the Louisiana treasurer can defend the legality and rationality of his decision… without ever discussing the reality of the climate danger! Because, if this rationality is contested, as BlackRock does, it can argue its legal prerogatives. And if the latter are called into question, it is democracy that we are attacking.
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