In response to legislation passed last year, Texas Comptroller Glenn Hegar has announced his office's list of financial companies that boycott the oil and gas industry.
“The environmental, social and corporate governance (ESG) movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Hegar said in a news release. “Our review focused on the boycott of energy companies, rather than a review of the entire ESG movement. 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."
The list of 10 financial companies 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,” Hegar said.
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, the story said. 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 are 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 initial list of companies subject to divestment include BlackRock, UBS Group, Credit Suisse, BNP Paribas and others.
According to a news release from the comptroller's office, 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.
“We will continue to refine this process and gather additional information about how these firms may be boycotting energy companies," Hegar said. "I am particularly interested in the misguided activism surrounding proxy voting. Some of these firms may be using investments essentially owned by Texas to directly push shareholder initiatives that run contrary to the interests of our state.”