Texas threatens to hit ESG firms over fossil fuel ‘boycott’

By Adam Aton | 03/17/2022 06:42 AM EDT

The state’s comptroller sent a letter about fossil fuel investing to 19 green-minded firms.

Texas State Comptroller Glenn Hegar speaks during a 2017 news conference.

Texas State Comptroller Glenn Hegar speaks during a 2017 news conference. Hegar and other Texas officials are clashing with Wall Street over efforts by major financial firms to pay more attention to the risks of climate change. AP Photo/Eric Gay

Texas is wrestling with how to hit back against Wall Street’s green posture.

The state’s top financial official is starting to inch toward action against some firms, after months of Texas Republicans bashing financial giants — especially BlackRock Inc. — for pledging to curb climate change through their investments.

GOP leaders say those climate commitments amount to a “boycott” of fossil fuel companies. Last summer, Texas enacted a law to divest state funds like retirement accounts from green-minded financial firms. But implementing that law has proved tricky.


Texas Comptroller Glenn Hegar yesterday sent letters to 19 financial companies asking them to “clarify their fossil fuel investment policies and procedures” and to list any of their mutual funds or exchange-traded funds that limit fossil fuel investments.

Hegar gave the companies 60 days to respond — extending a process that had previously been expected to wrap up in March.

BlackRock officials earlier this year met with Texas leaders and outlined the firm’s multibillion-dollar oil and gas investments (Climatewire, Feb. 24). But Republicans have been unswayed, pointing to BlackRock CEO Larry Fink’s continued outspokenness on cutting emissions.

“Our research thus far shows that some companies are telling us and other energy-producing states one thing, and then turning around and telling their liberal clients in other states another thing,” Hegar said in a statement.

“On one hand, they push net-zero and other environmental, social and governance (ESG) policies and use their influence and the dollars under their management to limit access to capital for Texas oil and gas firms,” he said. “Then these same firms tell Texas and other energy states that they’re committed to the fossil fuel sector. It is time for these companies to come clean, stop the big lie and realize they can’t have it both ways.”

Hegar’s letters ask for basic information (“Is your company publicly traded?”) and more detailed questions about internal processes, such as how executives involve themselves in fossil fuel investment policies.

The letters were sent to 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.

Hegar said he plans to send similar letters to over 100 more companies soon.