Texas says 10 companies, including BlackRock, ‘boycotting’ energy

Date:

Participant seen holding a sign outside BlackRock’s Manhattan headquarters, where their annual shareholder meeting was held, May 25, 2022.

Erik McGregor | Light rocket | Getty Images

Texas Auditor Glenn Hegar Wednesday accused ten financial companies, including investing titan BlackRock, and 350 investment funds of taking steps to “boycott energy companies.”

The move could force certain Texas state funds, such as state employee pension funds, to sell stock in these companies. It also puts these companies next to lists of other classes of companies covered by Texas’ divestment statutes, such as companies with “ties to foreign terrorist organizations” and ties to Iran and Sudan.

The list, which comes from an investigation first announced in March, is an attempt to draw public attention to companies that, according to Hegar, promote agendas that threaten the energy industry in Texas, the largest oil company. – and natural gas producing state in the United States. country. Texas produced 43% of the total crude oil produced in the United States in 2021 and 25% of its natural gas, according to the U.S. Energy Information Administration (EIA). Texas also has 31 petroleum refineries representing 32% of the nation’s refining capacity, making it the state with the most refineries and refining capacity of any state in the country.

Hegar said the focus on environmental, social and corporate governance (ESG) standards in finance had become a proxy for setting the political agenda.

“The environmental, social and corporate governance (ESG) movement has spawned an opaque and perverse system in which some financial firms no longer make decisions in the best interests of their shareholders or their customers, but instead use their financial clout to create a social and political agenda shrouded in secrecy,” Hegar said in a written statement published with the decision.

BlackRock has been hailed both as a leader in raising awareness of the implications of climate change on Wall Street and for failing to continue that initial leadership. In May, BlackRock said it would not vote for environmental and social shareholder proposals that are “unnecessarily prescriptive and restrictive” on boards of directors.

In response to Hegar’s announcement on Wednesday, BlackRock said it would object to the ruling.

“We disagree with the Comptroller’s opinion. This is not a fact-based judgment. BlackRock is not boycotting fossil fuels — investing more than $100 billion in Texas energy companies on behalf of our customers proves that,” a BlackRock told reporter. spokesman to CNBC in a statement.

According to James W. Coleman, a law professor at Southern Methodist University’s Dedman School of Law, the impact of the potential divestment in Texas poses less of a threat to financial firms than the potential precedent of financial investments becoming increasingly politically motivated. .

“Texas is a huge, fast-growing economy — bigger than Canada’s — so the investment decisions are important, but the pension funds in Texas aren’t as big, compared to the state economy, as funds in other states like California,” Coleman told CNBC. “Ultimately, the real risk to financial firms is less about losing one investor and more about political conflict spreading into investment decisions and splitting up their clients.”

David B. Spence, a law professor at the University of Texas at the Austin School of Law who teaches energy law, among other things, said the move is a political stunt by Hegar.

“I see it as a sort of act for voters by elected politicians competing for votes in an increasingly rewarding party for finding ways to stick your thumb in the eyes of Democrats,” Spence told CNBC. “It’s a shame that climate change has become a partisan issue, especially given the high level of concern about the issue among young Republicans. But as long as young Republican voters continue to vote Republican, there really isn’t much discouraging doing things like this.”

Spence noted that BlackRock had warned investors about climate change as an economic problem. “Climate change has become a determining factor in companies’ long-term prospects,” said BlackRock CEO Larry Fink in his 2020 letter to CEOs.

“Blackrock advised clients to consider climate risks because they believe it is economically rational to do so. So it is more than a little ironic that GOP politicians are punishing private sector actors for taking economically rational actions.” , Spence told CNBC. “It shows how hollow GOP rhetoric about ‘making the market work’ and ‘the babysitting state’ really is.”

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

More like this
Related

Bank holdups snowball in Lebanon as depositors demand their own money

Register now for FREE unlimited access to Reuters.comRegisterFive more...

Virginia will block students from accommodating transgender students

In a major rollback of LGBTQ rights, the administration...

Daniel Vogelbach, Jeff McNeil, Edwin Díaz key to Mets win

NEW YORK -- At several points in the Mets'...

Iranian woman dies ‘after being beaten by morality police’ over hijab law | Iran

A 22-year-old woman has died in an Iranian hospital...