Texas Bans Local And State Government From Doing Business With Fossil Fuel “Boycotters”

Texas Comptroller Glenn Hegar singled out banking businesses under a 2021 state law that bans most state contracts with corporations that curtail oil and gas investments.
Comptroller Glenn Hegar claimed 10 financial firms don’t support the oil and gas industry.

Hegar, a Republican seeking for reelection in November, banned BlackRock Inc. and other banks and financial firms from most state and local contracts after his office alleged the corporations “boycott” the fossil fuel sector.

Hegar asked hundreds of financial companies this year if they avoided oil and gas investments for renewable energy. A new Texas legislation prevents most state agencies and local governments from dealing with enterprises that have broken links with carbon-emitting energy providers.

State pension funds and local governments producing municipal bonds must divest from the list, Hegar said.

“The environmental, social, and corporate governance (ESG) movement has developed an opaque and perverse system in which some financial businesses no longer make decisions in the best interest of their shareholders or clients,” Hegar said in a statement on Wednesday.

New York-based BlackRock slammed Hegar’s decision.

A firm spokeswoman remarked, “This isn’t a fact-based conclusion.” BlackRock doesn’t shun fossil fuels; our $100 billion investment in Texas energy businesses proves that. The spokeswoman emphasized that elected and appointed authorities must serve the public. Politicizing state pension funds, restricting investor access, and affecting pensioners’ financial returns violates this duty.

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BNP Paribas SA, a French international banking group, Credit Suisse Group AG and UBS Group AG, Danske Bank A/S, a Danish multinational banking and financial services corporation, Jupiter Fund Management PLC, a London-based fund management group, Nordea Bank ABP, a Finnish financial services group, Schroders PLC, a British multinational asset management company, and Swedish banks Svenska Handelsbanken AB and Svenska Handelsbanken AB.

Goldman Sachs’ “Paris-aligned Climate US Large Cap Equity ETF” and JP Morgan’s “U.S. Sustainable Leaders Fund” focus on sustainable investing.

Texas energy experts said the law and Wednesday’s declaration were meant to punish financial institutions that don’t invest in oil and gas.
Ed Hirs, a University of Houston energy economist, remarked, “It’s all about return.” Fossil fuel companies, especially oil and gas corporations, haven’t done well in the stock market before this year.

Sierra Club Lone Star Chapter: Hegar’s “climate-denying publicity gimmick will cost taxpayers”

“Major financial institutions are beginning to grasp that investments in fossil fuels bring enormous risk in the face of an unavoidable clean energy transition,” said Sierra Club Fossil-Free Finance Campaign Manager Ben Cushing. “The fact that the Texas Comptroller unilaterally picked a handful of firms with substantial fossil fuel assets despite their climate promises demonstrates this is a political spectacle at Texas taxpayers’ expense.”

Southern Methodist University energy law professor James Coleman said both sides are politically motivated.
Coleman: “Not just from those hoping to rein in fossil fuels, but also from those worried about economic loss.”

Coleman added that when the state limits its commercial partners, it leaves money on the table.

Felix Mormann, a Texas A&M Law School professor who researches energy and climate change, says the impact on Texas taxpayers is hard to anticipate. He called Wednesday’s move a “symbolic step to resist ESG investing.”

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Will this promote Texas oil and gas? Morally, maybe,” Mormann told The Texas Tribune. Chevron, ExxonMobil, and other Texas oil-and-gas firms compete globally. I doubt the Comptroller is causing a Texas oil-and-gas boom.
Hegar accused Harris County of reducing spending on its constables’ offices, even though a projected budget would enhance their budgets. Republicans used Hegar’s accusation to undermine County Judge Lina Hidalgo, a Democratic rising star facing reelection in November.

Hegar and Gov. Greg Abbott both support removing state levies on tampons and sanitary pads.