Texas targets companies that divest from fossil fuels - The Dallas Morning News

AUSTIN — Texas has identified 19 major financial firms that may be in violation of a new state law that prohibits divesting from fossil fuels.

On Wednesday, Comptroller Glenn Hegar wrote to the companies – including JPMorgan Chase, BlackRock, and Wells Fargo & Company – demanding more information about their investment strategies for oil, natural gas and coal. Under the new law, companies that “boycott” the fossil fuel industry risk losing state contracts and investments from Texas pension funds.

“This is the wrong time to cut back on our investment in the vital fossil fuel industry, which has helped define our state’s success for more than 100 years,” Hegar, a two-term Republican, said in a statement. “Texas won’t sit idly by while Washington and Wall Street peddle a fairy tale that has real negative consequences for the Texas economy, our energy independence and our national security.”

Universities, foundations and public pension funds across the country have begun shifting away from fossil fuels in response to the growing threat of climate change. Not Texas.

Last year, the GOP-led Legislature enacted a law that bars the state from contracting with firms that limit business with the fossil fuel industry. The policy also calls for pension funds, such as the state employees and teacher retirement systems, to divest from companies that cut ties with oil and gas, so long as the moves won’t cause financial harm.

Hegar’s office is tasked with compiling the list of prohibited businesses. The companies he contacted on Wednesday must respond within 61 days or they will be “presumed to be boycotting energy companies,” according to copies of the letters obtained by The Dallas Morning News.

The firms, based worldwide, include BNP Paribas, Credit Suisse Group, HSBC Holdings and UBS Group, which has a Dallas office space located in Hotel Crescent Court. The companies did not immediately respond to a request for comment. JP Morgan Chase and London-based Man Group PLC, an investment management firm that is also listed, declined to comment.

Another round of letters will soon go out to 100 other publicly traded investment companies, according to the comptroller’s office.

It remains to be seen whether any will be blacklisted.

In January, Lt. Gov. Dan Patrick, who championed the bill last session, pressed Hegar to put BlackRock “at the top of the list” after CEO Larry Fink advocated an investment strategy focused on climate change and sustainability. But the New York-based investment manager has assured Texas officials it will “continue to invest in and support fossil fuel companies,” according to CNBC.

BlackRock did not immediately return a request for comment on Wednesday.

Hegar’s letter asks the firms whether they have “pledged to meet environmental standards beyond applicable federal or state law” and if they have written policies restricting investments in energy companies.

While Texas lawmakers have tried to steer corporate policy with the state’s pocketbook before – by barring contracts with companies that boycott Israel or do business with Iran — the efforts last year are far more expansive and financially consequential.

Lawmakers also blocked state and local governments from contracting with companies that restrict their business with the firearms industry. As a result of that change, several large banks have been shut out of underwriting municipal-bond deals in Texas.

source: https://www.dallasnews.com/news/politics/2022/03/16/texas-officials-identify-companies-that-may-run-afoul-of-new-law-against-boycotting-fossil-fuels/

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