NC Treasurer Folwell asks for ‘removal’ of financial CEO over environmental stance, while state invests in polluters, fossil fuels

By: - December 12, 2022 10:20 am

While NC Treasurer Dale Folwell called for the resignation or removal of the CEO of Blackrock, one of the world’s largest financial management firms over its environmental stance, North Carolina’s own pension funds are rife with known climate change deniers, as well as polluters, including Chemours, Enviva and Alcoa that have amassed violations in the state.

Last Friday, Folwell, a Republican, issued a statement to the Blackrock board of directors asking for Fink’s removal, citing “a loss of confidence in Fink’s leadership due to his focus on Environmental, Social and Corporate Governance.”

That focus includes urging publicly traded companies to transition to carbon net-zero by 2050. A year ago, Gov. Roy Cooper, a Democrat, issued Executive Order 246, setting the same reduction goals.

NC Treasurer Dale Folwell (Official photo)

“Unfortunately, Mr. Fink’s political agenda has gotten in the way of his same fiduciary duty,” Folwell wrote. A focus on ESG is not a focus on returns, and potentially could force us to violate our own fiduciary duty of loyalty. Ultimately, Mr. Fink’s continued ideological pressure could result in using ESG scores against states and local governments, lowering their credit ratings and thus driving up their cost of borrowing at taxpayers’ expense.”

According to most recent Securities and Exchange Commission filings by the state treasurer’s office, known as a 13-F, North Carolina’s investments include many companies with shoddy environmental track records:

  • Alcoa (91,276 shares), has polluted a predominantly Black community in Badin, as well as Badin Lake, a popular fishing and swimming destination.
  • Chemours (69,361 shares), and its predecessor DuPont (214,977 shares), have discharged toxic compounds into the groundwater and the Cape Fear River, contaminating the drinking water of hundreds of thousands of people. The treasurer’s office also invests in spinoff company, Corteva (320,495 shares), which DuPont has used to shield its assets from legal action.
  • Enviva (13,116 shares), operates four wood pellet plants in North Carolina, all in communities of color. The company uses timber from clearcutting operations, including valuable hardwoods, to grind into pellets. Enviva ships those pellets overseas, where they are burned instead of coal. This not only decimates forests, but emits significant carbon dioxide, a known greenhouse gas, at every step of the process.
  • Stericycle (39,278 shares) operates a medical incineration facility near Haw River. Because of its repeated and significant air quality violations, the company has proposed entering into a Special Order by Consent with the NC Department of Environmental Quality. DEQ has fined the company $40,000.
  • ExxonMobil (1,814,838 shares), knew about the contributions of fossil fuels to climate change more than 40 years ago, yet spent millions to distribute misinformation, according to Scientific American. Chevron (855,642 shares), conducted a similar campaign.
  • The treasurer’s office invests in a few renewable energy companies. — Avangrid (30,372 shares), which operates a small wind farm in eastern North Carolina, and Brookfield Renewables (54,719 shares). However, Folwell’s office holds millions of shares in fossil fuel companies.

Policy Watch previously reported on Folwell’s investments in Chemours. At that time, Folwell’s office told Policy Watch that Chemours stock is in an index fund that includes 800 publicly traded US companies whose individual value is between $2 billion and $10 billion. A portfolio manager, not the state treasurer, controls the stocks in those index funds.

Folwell reiterated that point in last week’s announcement about BlackRock. “As keeper of the public purse my duty is to manage our investments to ensure that the best interests of those that teach, protect and serve, as well as of our retirees, are always paramount,” Folwell said.

However, the state’s retirement fund also invests in Coinbase Global (67,660 shares), a cryptocurrency exchanges. Its value has fallen from $232 per share a year ago to $40 today — a free fall of 82%.

Folwell also supports laws that would allow him to wield his financial power to rule out investments that collide with conservative ideology. He said he supports laws like the “Eliminate Political Boycotts Act” in Texas; it requires the state’s pension and K-12 school endowment to divest from firms that “boycott” the state’s fossil fuel industry.

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Lisa Sorg
Lisa Sorg

Assistant Editor and Environmental Reporter Lisa Sorg helps manage newsroom operations while covering the environment, climate change, agriculture and energy.