NEW YORK, March 19 (Reuters) - A Texas schools fund said

it told BlackRock ( BLK ) on Tuesday it would terminate a

contract to manage around $8.5 billion of state money due to the

energy investment policies of the world's largest asset manager.

Texas has led politically conservative U.S. states in

restricting public funds from doing business with BlackRock ( BLK ),

which has itself been a leader among Wall Street firms in

embracing environmental, social and governance (ESG) principles.

Texas Permanent School Fund Chair Aaron Kinsey said in a

statement posted on X that the fund's relationship with

BlackRock ( BLK ) breached state law against investing with companies

accused of boycotting energy companies.

"BlackRock's ( BLK ) dominant and persistent leadership in the ESG

movement immeasurably damages our state's oil and gas economy

and the very companies that generate revenues for our PSF ...

The PSF will not stand idle as our financial future is attacked

by Wall Street," the statement said.

A BlackRock ( BLK ) spokesperson said, "BlackRock ( BLK ) is helping

millions of Texans invest and save for retirement. On behalf of

our clients, we've invested more than $300 billion in

Texas-based companies, infrastructure and municipalities,

including $125 billion invested in the energy sector.

The spokesperson cited a $550 million joint venture with oil

and gas firm Occidental Petroleum ( OXY ) and an event last

month where Chief Executive Larry Fink and a Texas official

pledged to work together to invest in the state's energy

infrastructure.