West Virginia has drawn a line in the sand with big banks that allegedly refuse to finance coal development in the state.
West Virginia State Treasurer Riley Moore recently announced that major banks — including behemoths Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo — have been placed on its “Restricted Financial Institution List” and would be “banned” from doing business there for their alleged lack of support for fossil fuel financing in the state.
This means that the named banks will no longer be eligible to win banking contracts launched by the state of West Virginia. U.S. Bancorp was almost included but changed its policies in time.
West Virginia is the maiden state to sever ties with financial institutions because of their moves to thwart coal mining activities in favor of backing alternate energy production processes.
In early 2022, the state treasurer spearheaded a law giving the green light to retaliate against banks for boycotting commodities like coal.
In a recent interview, Moore told Fox Business that the state now has “outright prohibitions on lending to the fossil fuel industry,” he said.
Highlighting thermal coal, Moore said, “Thermal coal is obviously important to West Virginia, but it’s also important to the country.”
The coal industry also suffered a recent blow when Democratic senator Joe Manchin from West Virginia revealed his support of his party’s climate change and tax bill.
The deal was designed to deliver incentives to renewable energy companies, but critics like U.S. Representative Alex Mooney said it leaves the coal industry out in the cold. Additionally, Republican National Committee (RNC) Chairwoman Ronna McDaniel argued that the bill would do little to lower Americans’ energy bills and could even increase natural gas costs.
Prior to the financing ban, Moore warned the banks that they were in jeopardy of ruining their relationship with the state for their efforts toward banning fossil fuel development. He gave them a month and a half to respond.
Of the five banks, only U.S. Bancorp responded, agreeing to remove its anti-coal stance from its ESG policies, shielding the firm from inclusion in the financing ban.
Later in his interview with Fox Business, Treasurer Moore cited what he described as a “war on coal,” which he blamed for the loss of jobs among West Virginians. Moore traced this war back to the Obama administration. Coal, he reminded, is vital for the heating and cooling of American households and automobiles.
Most of the big banks banned from doing business in West Virginia had previously disclosed that they were cutting their coal industry financing to “reduce the release of harmful carbon emissions” associated with these projects.
Morgan Stanley defended itself, denying that it boycotts fossil fuel companies. JP Morgan called West Virginia’s financing ban “shortsighted” and “disconnected from the facts,” according to Fox Business. In addition, Wells Fargo said it still “values its relationship with the state of West Virginia” and disagrees with the financing ban.
Meanwhile, Moore maintained that the banks should make their financing decisions with a view toward risk and capital rather than what he called “some left-wing political ideology.” He predicted that “more Republican-led states will soon push back against environmental, social, and corporate governance (ESG) policies from the private sector.”