(The Center Square) – The Texas Comptroller’s Office has added five new financial companies to its list of those that boycott the oil and gas industry through their Environmental, Social and Governance (ESG) policies.
There are now 15 companies and 353 publicly traded investment funds on the list, an increase from the number first announced last year.
“I am extremely proud that Texas was the first state to show leadership by shining a bright light and bringing transparency to this absolutely critical issue,” Comptroller Glenn Hegar said. “Texas has been a leader in calling out investment firms that have been playing politics with the retirement money of hard-working Americans. Our goal has always been to bring some honesty to what has really been a one-sided and intellectually dishonest discussion.”
The institutions on the list are subject to Texas Government Code Chapter 809 divestment provisions, which define a financial company as a publicly traded financial services, banking or investment company.
The new companies added to the list are AMP Limited, Credit Agricole SA, IMPAX Asset Management Group PLC, Rathbone Investment Management Ltd., and Societe General SA.
In August 2022, Hegar announced nearly 350 investment funds and 10 companies were on the list, including Blackrock, Inc., BNP Paribas SA, Credit Suisse Group AG, Danske Bank A/S, Jupiter Fund Management PLC, Nordea Bank ABP, Schroders PLC, Svenska Handelsbanken AB, Swedbank AB, and UBS Group AG.
In May, he added HSBC Holdings Plc to the company list after learning about its new policy prohibiting investment in oil and natural gas fields.
In August, S&P Global Ratings altered its ESG policy to comply with Texas law.
After Credit Suisse merged with UBS Group AG this summer and is no longer publicly available, it was removed from the list.
State governmental entities are prohibited from investing in the companies and investment funds on the list. If they were invested in them, they are required to follow divestment protocol described in the statute. State entities include the Employees Retirement System of Texas, Teacher Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System and the Texas Permanent School Fund.
Hegar said his goal has been “to create a more open, honest and transparent conversation … to end the doublespeak by so many companies and show the critical impact that fossil fuels have on our daily lives. Fostering transparent conversation in Texas and throughout our nation ultimately creates a change in behavior by financial institutions.”
He also said Texas’ efforts have led to “witnessing tremendous progress.”
ESG funds “are experiencing huge outflows and closing faster than they are opening,” he said. “We are getting real data showing the underperformance of investments that shun fossil fuels. Proxy votes by big fund managers in support of ESG initiatives have dropped precipitously. Even Standard & Poor’s reversed course on highlighting its ESG ratings, yet more work is needed. These are wins that show the impact Texas and other states are having, and I look forward to continuing this work and giving Texans the transparency they deserve on this critical issue.”
The law requires state agencies to notify the comptroller’s office within 30 days of receiving the updated list about whether any of their assets are invested with any company on the list. They are also required to submit a report no later than Jan. 5 of every year to the state Senate and House and office of the Attorney General to identify all securities sold, redeemed, divested or withdrawn in compliance with the law.
Hegar’s office is continuing to review financial institutional policies on a regular basis.