Texas Comptroller Glenn Hegar keynoted the Texas Transportation Forum on January 16, 2015. Photo courtesy of the office of the Texas Comptroller. License.
You’ve read about efforts by West Virginia State Treasurer Riley Moore to push back against banks targeting fossil fuel energy companies. Now a heavyweight state is taking it up another notch. Texas has joined the fray in full swing, and according to The Wall Street Journal, Texas Comptroller Glenn Hegar has “published a list of 10 financial companies and nearly 350 investment funds” which government entities will be “required, with some exceptions, to divest from them if they stay on the list past certain legally mandated deadlines.” The Journal’s Richard Vanderford reports:
Texas has blacklisted BlackRock Inc., BNP Paribas, UBS Group AG and other financial companies for allegedly boycotting the fossil-fuel industry, a move that could lead state pensions and other public entities to sell their shareholdings in those companies.
Texas Comptroller Glenn Hegar on Wednesday published a list of 10 financial companies and nearly 350 investment funds, an exercise mandated under a state law meant to punish Wall Street banks that have purportedly burnished their green image by turning away from oil and gas.
The law, which took effect in September 2021, requires Mr. Hegar to name financial institutions and funds that in his judgment refuse to do business with energy companies, and potentially divest from them. Governmental entities are required, with some exceptions, to divest from them if they stay on the list past certain legally mandated deadlines
In addition to banks and fund managers, Texas also identified specific funds that could be subject to a state-mandated sale, including funds controlled by investment powerhouses Fidelity Investments and Vanguard Group.
Texas is among several conservative-leaning states that are seeking to use the public purse to push against the environmental, social and governance, or ESG, movement. Energy is a mainstay of the state’s economy.
“The 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,” Mr. Hegar said.
The Investment Company Institute, an investment industry association, said the move would hurt the financial prospects of the state’s pension recipients by limiting funds’ investment options.
BlackRock said the comptroller’s opinion wasn’t “fact-based,” noting that it has invested over $100 billion in Texas energy companies. UBS said it provided the comptroller with “extensive information” showing it doesn’t boycott energy companies even under a broad interpretation of Texas law.
Action Line: Americans need state officials who will stand up for state employees and citizens to preserve the fiduciary management of state funds, and to protect industries from discriminatory banking practices. If your state isn’t working to protect you and your business, maybe it’s time to look for a better America. Start your search in my Super States, and let me know how your journey goes. In the meantime, click here to subscribe for my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.
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