By Ross Kerber

(Reuters)—Florida’s Chief Financial Officer said on Thursday his department would pull $2 billion worth of its assets managed by BlackRock Inc, the biggest such divestment by a state opposed to the asset manager’s environmental, social, and corporate governance (ESG) policies.

While the move will hardly dent BlackRock’s $8 trillion in assets, it underscores how the backlash among many Republican politicians, such as those in Florida, against ESG investing, which they see as promoting a “woke agenda,” is gathering steam.

Republicans are set to assume control of the House of Representatives in January. This will allow them to hold hearings on ESG and grill the chief executives of BlackRock and other major assets managers about their ESG policies, and also pressure regulators to scrutinize them.

In a statement, Florida CFO Jimmy Patronis said the state’s Treasury, which he oversees, would remove BlackRock as manager of about $600 million of short-term investments and have its custodian freeze $1.43 billion of long-term securities now with BlackRock, with an eye on reallocating the money to other money managers by the start of 2023.

Patronis accused BlackRock of focusing on ESG rather than higher returns for investors.

“Florida’s Treasury Division is divesting from BlackRock because they have openly stated they’ve got other goals than producing returns,” Patronis said in the statement provided by his office.

A BlackRock representative did not immediately comment.

While BlackRock has encouraged portfolio companies to take steps like disclosing more data about their carbon emissions or to add more diverse board members, it has said its efforts are aimed at improving company performance and resisted calls for steps like divesting from oil companies. U.S. Democratic officials have argued BlackRock doesn’t press ESG concerns enough.[L4N30T3PB]

So far, only Republican-controlled states have made major reallocations away from BlackRock, including $794 million pulled by Louisiana’s treasurer [L4N3162LQ] and $500 million by Missouri’s treasurer, both in October.

Earlier this week, Republican attorneys general from various states asked a federal regulator to limit Vanguard Group Inc’s activities over ESG concerns, and asked United Parcel Service Inc and FedEx Corp to clarify their policies on tracking firearms shipments.

(Reporting by Ross Kerber in New York; Editing by Chizu Nomiyama)

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