BlackRock, the world’s largest asset manager and the main financier of the Great Reset and ESG, has now been downgraded by UBS.

Brennan Hawken, an analyst at UBS, downgraded the stock of BlackRock (NYSE: BLK) to Neutral from Buy. They also slashed the stock price target to $585 from $700 over growing pushback to its ESG efforts.

“We are downgrading BLK to Neutral based on environmental pressure to earnings and risk from the firm’s ESG positioning,” Hawken wrote in a note, stating that BlackRock could face increased regulatory inspection and the possibility of diminished fund management business.

“BLK’s early and energetic adoption of ESG principles in its fund management and shareholder proxy activities have positioned the firm as an ESG leader in our view. However, as performance deteriorates and political risk from ESG has increased, we believe the potential for lost fund mandates and regulatory scrutiny has recently increased.”

This decision comes after several states announced that they will be divesting from Blackrock over their ESG push.

Earlier this year West Virginia Treasury Secretary Riley Moore announced that his state would be taking their money out of Blackrock. West Virginia is the second-largest coal producer and the fifth in total energy production.

Recently Louisiana announced that they will be divesting more than $800 million from Blackrock before the end of 2022.

South Carolina has now joined the growing list and has announced that they will be divesting $200 million from Blackrock before the end of 2022.

In total, Blackrock will be losing over $1 billion by the end of 2022 due to states divesting their assets from Blackrock over their ESG push, with more states likely to follow over the coming months. In August, 19 GOP attorney generals sent a letter to Blackrock CEO Larry Fink, challenging his firm’s commitment to ESG priorities.

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