BlackRock, JPMorgan, Wells Fargo, UBS Group: these are among the nearly 180 international financial companies Texas Comptroller Glenn Hegar has contacted to determine if they are boycotting the fossil fuel industry. These firms manage billions of Texas tax dollars, using our capital to advance anti-energy initiatives – likely in violation of a new state law.
Senate Bill 13 – also known as the Oil and Gas Investment Protection Act – was passed by the Texas Legislature in 2021 and says Texas should not contract with or invest in companies boycotting energy companies. It also states that if a company is placed on the list as a boycotter of Texas energy companies, state agencies are “required to sell, redeem, divest, or withdraw all publicly traded securities” from that company.
For close to 200 years, consumers have testified through the market that oil and gas is an affordable, reliable, efficient source of energy.
The energy revolution in Texas began at Spindletop 120 years ago, fueling an unprecedented century of innovation; this progress continues in our state as the Permian Basin continues to exceed production expectations. New entrants like wind and solar cannot match the reliability of traditional energy sources. Not to mention the economics – renewable energy costs taxpayer dollars via massive subsidies, while traditional energy employs more than 400,000 Texans and annually contributes $15 billion in taxes, according to the Texas Oil and Gas Association.
As the debate over the accuracy of climate change models intensifies, a number of out-of-state financial companies have their sights set on sabotaging Texas’ fossil fuel industry – an action with massive rippling consequences on the industry and the millions of Texans who rely on our energy sources. Firms like San Francisco-based Genstar Capital are promoting divestment of energy companies through its ownership of Institutional Shareholder Services (ISS).
ISS is a little-known company but one that exerts an astonishing influence over corporate activities. Most noteworthy, they fought successfully to force Irving-based Exxon Mobil to replace several board members with so-called “clean energy” activists. This troubling subversion of a Texas company is part of ISS’s commitment to Environmental, Social, Governance (ESG) policies – policies that are extremely damaging to our nation’s economy and energy supply. ESG advocates at ISS are now openly pushing for complete divestment from oil and gas entirely, a move which would severely damage Texas’ energy market, including independent producers that account for much of the innovation that has led to the recent boom in production.
What should be even more troubling to Texans is that the Employees Retirement System of Texas (ERS) cast some of its proxy votes through ISS to support climate change resolutions. This highlights the problem that between the various state pensions hundreds of billions of more Texas taxpayer dollars are likely invested in Genstar and similar companies that are pushing their ESG priorities.
Texas leaders should renew their efforts to eliminate anti-fossil fuel policies. Not only should this include Texas no longer doing business with companies like Genstar pushing ESG, but also ending the billions of dollars of subsidies and other benefits being provided to the renewable energy industry by the state of Texas and local governments. As the incident with the ERS demonstrates, Texas needs to put its money where its mouth is.
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