Texas Attorney General Ken Paxton, along with ten other state attorneys general, sent a warning to some of the largest financial institutions in the world, cautioning that their diversity, equity, and inclusion (DEI) initiatives could trigger a lawsuit.
The letter, addressed to BlackRock, Goldman Sachs, JPMorgan Chase, Bank of America, Citigroup, and Morgan Stanley, raises concerns that the companies’ current DEI policies, particularly those focusing on race and gender-based quotas or aggressive environmental agendas, might be in breach of their legal obligations to both customers and investors.
Paxton and his cohort of attorneys general are also demanding that each of the addressed companies respond with detailed clarifications on their currently implemented DEI policies, according to a recent press release.
The move follows Paxton’s prior efforts to encourage big U.S. banks to withdraw from the Net-Zero Banking Alliance (NZBA), a group advocating for radical climate and environmental goals over investor interests. According to Paxton and other critics, the Alliance’s stance overlooks the interests of consumers by pushing companies to adopt extreme environmental agendas.
“Banks and financial institutions are finally starting to realize that the ESG and DEI policies pushed by radical activist groups are bad for consumers and potentially violate the law,” Paxton wrote in the release.
The warning letter follows Paxton’s previous review of the practices of a few different banks, including JPMorgan Chase and Bank of America, as part of an investigation into whether they are in compliance with Senate Bill 13.
SB13 prohibits government entities from engaging in contracts with companies that “boycott” energy companies.
Paxton’s review began in October of 2023 after concerns that these banks’ membership in the NZBA might classify them as participants in an energy boycott, potentially violating state law. The review eventually led to the withdrawal of every sizeable American bank from the NZBA.
The financial institutions named in the letter have now been given a chance to address the attorneys’ general concerns about their DEI strategies, with Paxton’s looming legal threat if any violations of state or federal laws are found.
“Unlawful race- and sex-based quotas and so-called ‘green energy’ schemes will not be allowed to stand and I will continue to urge these organizations to uphold the legal obligations they owe to consumers and investors. Any institution found to be violating the law will be held accountable,” he added.