Texas Halts Business With Some Financial Firms


Texas Comptroller Glenn Hegar said 10 financial firms can no longer do business with any level of state government because they have reduced or ended investments in the fossil fuels industry. | Image by Eddie Gaspar, The Texas Tribune

Texas Comptroller Glenn Hegar announced Wednesday that some national financial firms would not be allowed to do business with the state of Texas.

The ban comes as the Comptroller’s office decided that companies such as BlackRock Inc., JP Morgan, and Goldman Sachs have actively “boycotted” the oil and gas industry.

Last spring, the Texas Comptroller’s office sent surveys to different companies inquiring into whether or not they were investing in the oil and gas industries. The questioning was enabled by a Texas law enacted last September, which allows state agencies to cut ties with companies that boycott energy companies.

The ban specifically targets funds that aim to diversify away from oil and gas and instead invest the majority of funding into renewable energy. These companies include Fidelity, JP Morgan, Goldman Sachs, BlackRock, UBS, and Vanguard funds.

Goldman Sachs’ “Paris-aligned Climate US Large Cap Equity ETF” and JP Morgan’s “U.S. Sustainable Leaders Fund” are two examples of such funds that are restricted. These funds have majority holdings in Apple, Microsoft, Johnson and Johnson, and Meta. 

Any state-backed investments, including pension funds, must be divested from these firms, Hegar stated. “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,” said Hegar in Wednesday’s statement. 

“Elected and appointed public officials have a duty to act in the best interests of the people they serve,” said a spokesperson for BlackRock Inc. “Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty.”

They added that BlackRock does not shy away from oil and gas investments and that “investing over $100 billion in Texas energy companies on behalf of our clients proves that.”

Texas-based energy companies, such as Chevron and ExxonMobile, were estimated to be slightly overvalued and not expected to provide much mid-term return. “Quite honestly, fossil fuel companies, in particular oil and gas companies, have not been great performers in the (stock market) prior to this year,” said Ed Hirs, an energy economist at the University of Houston.

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