The leader of one of the companies Texas Comptroller of Public Accounts Glenn Hegar accused in writing of violating the state’s Oil & Gas Protection Act said it remains steadfast in meeting its net zero goals. BlackRock CEO Larry Fink issued a letter Thursday (March 24) to the company’s shareholders reaffirming that commitment.
In the correspondence published on BlackRock's website, Fink explained how the war in Ukraine will prompt a shift to greener energy. European policy makers have been promoting investment in renewables as a key to achieving energy security, according to the CEO.
"Longer term, I believe that recent events will actually accelerate the shift toward greener sources of energy in many parts of the world," Fink wrote. "During the pandemic, we saw how a crisis can act as a catalyst for innovation. Businesses, governments and scientists came together to develop and deploy vaccines at scale in record time."
Fink said that BlackRock has historically been in favor of a transition toward renewable energy but warned the transition won't occur quickly.
"The energy transition can only work if it is fair and just. Importantly, it will not occur overnight or in a straight line," the CEO wrote. "It requires us to shift the energy mix from brown to light brown to light green to green."
BlackRock was among the 19 companies Hegar earlier this month warned may have been in violation of the Oil & Gas Investment Protection Act, or SB13, which the Texas Legislature approved during its 87th session, the Austin Journal reported.
The Texan reported that the 33-year-old multinational investment corporation was on a list of apparent SB13 offenders that included Abrdn, PLC; 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 & Company.
“A handful of companies are echoing promises by the Biden administration about a ‘transition’ to green energy,” Hegar said in a statement issued by his office. “They’ve managed to convince people that electric cars and wind and solar power generation can meet our energy needs, and if we just stop investing in oil and gas, the transition will be swift and painless."
The Houston Daily reported that SB13 bars state entities such as pensions from working with financial firms that eschew energy companies.
It's the comptroller's responsibility to compile a list of those companies and notify them in writing that the state could divest from them if they don't lift their boycotts, according to the law, the Houston Daily reported.
Earlier this year, Lt. Gov. Dan Patrick wrote Hegar to have BlackRock included on the list, a press release issued by the lieutenant governor's office said.
"As you prepare the official list of companies that boycott energy companies, I ask that you include BlackRock, and any company like them, that choose to hurt Texas oil and gas energy companies by boycotting them in violation of Senate Bill 13," Patrick said to the comptroller, according to the release.
Hegar said in the release that the companies accused of violating SB13 have approximately two months to formally respond.
"A company that fails to provide clarification 60 days after receiving this letter will be presumed to be boycotting energy companies," the comptroller stated.
In his letter, Fink stressed the importance of putting on a united front in meeting net zero goals.
"In the transition to net zero we will need to pass through many shades of brown to shades of green," he wrote. "I remain optimistic for the future and continue to believe that our collective actions today can make a meaningful difference in the years to come."