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Texas Comptroller Glenn Hegar on Wednesday announced the names of several financial institutions he says are hostile to the state’s energy industry and could impact their ability to do business in the state.
The 10 financial companies, which include cost BlackRock Inc. and UBS Group AG, are part of an inquiry conducted by Hegar’s office earlier this year.
“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 statement.
In March and April, Hegar sent inquiries to more than 150 companies requesting information on whether they were shunning the oil and gas industry in favor of sustainable investing and financing goals, Bloomberg reported.
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BlackRock offices in New York City. The company, along with nine others, were named by Texas Comptroller Glenn Hegar as being hostile to the state’s fossil fuel sector. (Erik McGregor/LightRocket via Getty Images / Getty Images)
The move stems from a Texas law that limits Texas governments from entering into certain contracts with companies that have severed ties with companies that emit carbon into the atmosphere.
Fox Business has reached out to BlackRock and UBS.
In a statement to Fox Business, BlackRock said it disagrees with Hegar.
“This is not a fact-based judgment,” the statement said. “BlackRock does not boycott fossil fuels – investing over $100 billion in Texas energy companies on behalf of our clients proves that. Elected and appointed public officials have a duty to act in the best interests of the people they serve. Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees is not consistent with that duty.”
Earlier this week, Texas lawmakers demanded four top financial services firms hand over details of their investment practices as part of an investigation into the companies’ so-called environmental, social, and governance (ESG) standards and how they impact the state’s public pensions.
The Texas Senate Committee on State Affairs, led by Chairman Bryan Hughes, sent letters to investment giants BlackRock Inc., State Street Global Advisors, and The Vanguard Group, along with Institutional Shareholder Services Inc. (ISS) on Aug. 10, requesting documentation related to the companies’ decision-making involving their respective ESG practices.
State Sen. Bryan Hughes speaks during a Senate Committee on State Affairs hearing at the Capitol on July 10, 2021, in Austin, Texas. (Photo by Tamir Kalifa/Getty Images / Getty Images)
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The letters give the companies until close of business on Sept. 9 to comply. They requested documentation and correspondence pertain to climate activist groups, proxy votes involving Texas-based companies, and decisions on whether to invest in companies that are part of the fossil fuel industry.
According to the Texas Economic Development Corporation, energy accounts for almost 300,000 jobs in Texas, and royalties from oil and gas help fund public education in Texas from kindergarten to its large public universities including the University of Texas and Texas A&M.
Fox Business’ Breck Dumas contributed to this report.
