Texas Attorney General Ken Paxton has released an advisory letter explaining the duty of government entities to avoid contracting with companies that promote environmental, social, and governance (ESG) policies and engage in the boycott, divest, and sanction (BDS) movement against Israel.
“Texas law prohibits state agencies and political subdivisions … from contracting with businesses that boycott energy companies, discriminate against firearm entities or associations, or boycott Israel,” Paxton’s letter noted. “As Attorney General, my job is to uphold state law and ensure that Texas remains a friendly state for companies to do business.”
“Given the recent brutal Hamas terrorist attacks against Israel, it is more important than ever to enforce public policy supportive of one of America’s closest allies and a beacon of freedom in the Middle East,” he added, referring to the ongoing war that began last week.
“Since 2017, the Texas Legislature has passed, and Governor Greg Abbott has signed into law, a series of restrictions on the ability of Governmental Entities to do business with companies that boycott energy companies, discriminate against firearm entities or associations, or boycott Israel,” he reiterated. “Pursuant to these laws, no Texas Governmental Entity may enter into a contract with such boycotters or discriminators for the purchase of goods or services with a value of at least $100,000.”
Referring to lists compiled by the comptroller of public accounts evaluating which companies boycott Israel and engage in ESG policies, Paxton named companies such as Blackrock, Credit Suisse Group, Ben & Jerry’s ice cream, and many others.
The letter concluded with the reminder, “It is the responsibility of all Governmental Entities to exercise due diligence to uphold both the letter and spirit of state law.”
“Moreover, governmental entities are not free to do business with firearm entity discriminators, energy company boycotters, or Israel boycotters merely because neither the Comptroller of Public Accounts nor the Attorney General has publicly designated them as such,” he added.
“The Office of the Attorney General will continue to vigorously enforce our laws that prevent taxpayer funds from going to companies whose ‘ESG’ policies harm Texans or key Texas industries,” Paxton further explained in a press release. “Companies who discriminate against firearms businesses and organizations, the oil and gas industry, or the nation of Israel will not enjoy the opportunity and privilege of winning public contracts in Texas.”
As reported by The Dallas Express, Paxton has aggressively worked to prevent Texas taxpayer money from being invested in companies that do not support the oil and gas industry.
Similarly, Comptroller Glenn Hegar previously explained to The Dallas Express that his agency, pursuant to Texas law, works to identify which organizations and companies take anti-fossil fuel stances.
“My prerogative is about changing behavior — about connectivity, open, honest dialogue,” he said. “It’s about managing a political objective that continues to evolve … that’s why transparency is imperative.”
Still, proponents of initiatives like ESG have claimed that the policies reflect positively on companies who enact them.
International financial services organization KPMG noted, “ESG ratings have become important when investors analyse their potential future investments, and therefore it should not be neglected by companies. Most ESG ratings measure companies’ exposure to risks and opportunities related to [the tenets of ESG]. A high rating, among other things, mean[s] that the company is good at handling these risks.”
“Many investors prefer to invest in companies with a good rating, as they often have easier access to capital, better brand reputation, easier to attract talent and have better control over their risks.” the company continued.