Texas Comptroller Glenn Hegar recently announced his office's list of financial companies that boycott the oil and gas industry, setting the stage for Texas to prohibit public fund investment to BlackRock, UBS and others.
Last year during Texas' 87th legislative session, lawmakers passed the Oil & Gas Investment Protection Act (SB13), which prohibits state entities such as pensions from investing in financial companies boycotting energy companies, the Austin Journal previously reported. More specifically, the law requires the comptroller of public accounts to maintain a list of companies that refuse to do business with or penalize energy companies because they do not pledge to meet regulatory standards beyond applicable state and federal law. Subsequently, letters were sent to the companies listed alerting them that the state of Texas will divest from their company or fund should they continue their boycott of energy companies.
In April, Hegar warned 19 financial firms that they may lose their contracts with the state if they continue to divest from fossil fuels. The Austin Journal reported that 19 companies to receive letters from Hegar were: Abrdn PLC; BlackRock; BNP Paribas; Credit Suisse Group AG; Danske Bank A/S; HSBC Holdings PLC; Invesco Ltd.; JPMorgan Chase & Co.; Jupiter Fund Management PLC; Man Group PLC; NatWest Group PLC; Nordea Bank Abp; Rathbones Group PLC; Schroders PLC; Sumitomo Mitsui Trust Holdings Inc.; Svenska Handelsbanken AB; Swedbank AB; UBS Group AG; and Wells Fargo & Co.
The comptroller's Aug. 24 list of companies subject to divestment include BlackRock, UBS Group, Credit Suisse, BNP Paribas and others.
“Our review focused on the boycott of energy companies, rather than a review of the entire ESG movement,” Hegar said. “This research uncovered a systemic lack of transparency that should concern every American regardless of political persuasion, especially the use of doublespeak by some financial institutions as they engage in anti-oil and gas rhetoric publicly, yet present a much different story behind closed doors. This list represents our initial effort to shine a light on entities that are engaging in these practices and create some clarity for Texans, whose tax dollars may be working to directly undermine our state’s economic health.
“A diverse energy portfolio is necessary for Texas to meet our future energy needs, and a vibrant Texas oil and gas industry is a stabilizing force in today’s economic and geopolitical environment,” Hegar said. “My greatest concern is the false narrative that has been created by the environmental crusaders in Washington, D.C., and Wall Street that our economy can completely transition away from fossil fuels, when in fact, they will be part of our everyday life into the foreseeable future. A complete divestment of the industry is not only impractical and illogical but runs counter to the economic well-being of Texas and our citizens.”
According to the release, public Texas entities required to divest include the Employees Retirement System of Texas, Teacher Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System and the Permanent School Fund, which collectively manage over an estimated $325 billion of assets.