Big banks that use their vast financial assets to oppose the fossil fuel industry in the name of reducing climate change are doing damage control as state treasurers and lawmakers take action against woke environmental, social and governance (ESG) investing.
By taking environmental concerns into account in their investment decisions, large financial firms such as BlackRock, Goldman Sachs, JPMorgan, Wells Fargo and Morgan Stanley are operating what some policy experts, GOP lawmakers, and state treasurers say is an effective boycott of the fossil fuel industry.
“Pursuant to West Virginia Code §§12 1C 1, et seq., the West Virginia State Treasurer is authorized to prepare and maintain a list of financial institutions engaged in a ‘boycott of energy companies,’” Moore said at the time.
In January, Moore announced that West Virginia’s Board of Treasury Investments would no longer use BlackRock investment funds in its banking transactions, saying CEO Larry Fink undermined the fossil fuel industry “under the guise of helping the planet.”
“This is how we’re gonna win in the fight against ESG, is pushing back and standing up and fighting like this,” Moore told the Daily Caller.
West Virginia’s actions did enjoy some success. U.S. Bank, which Moore claims originally had policies that penalized the fossil fuel industry, did not make the list of banned financial institutions after demonstrating to the state that they had eliminated said policies.
“They actually changed their policy. That’s the big win,” Moore told the Caller.
BlackRock, Goldman Sachs, JPMorgan, Wells Fargo and Morgan Stanley did not change their policies, although all of the companies sent letters to Moore claiming they did not boycott the fossil fuel industry, an assertion which Moore says he does not believe is sincere. (RELATED: ‘It’s A Scam’: House Republicans Prepare Next Salvo In War On Woke Capital)
Goldman Sachs claimed in its letter to the state treasurer that it had invested more than $17.8 billion in fossil fuel companies just in the last year, the Financial Times reported. JPMorgan claimed in a letter that it had invested $42.6 billion in “credit exposure” for fossil fuel companies, according to the outlet.
“What they’ll say is, ‘well we have this investment in a gas project or we have this investment in oil or something like that.’ Now, fossil fuel is all three—coal, gas and oil—and if they have a prohibition on one then that is boycotting the fossil fuel industry,” Moore said to the Caller.
“With millions in state contracts on the line in West Virginia alone, state treasurers’ actions are forcing firms to decide what is more important: profits or a partisan agenda,” Derek Kreifels, CEO of the State Financial Officers Foundation (SFOF) told the Daily Caller.
JPMorgan declined the Daily Caller’s request for comment. BlackRock, Goldman Sachs, Wells Fargo, and Morgan Stanley did not respond to request for comment.
The ratings agency seeks to penalize fossil-fuel producers. Its ‘ESG’ push is unlikely to end there, writes Marlo Oakshttps://t.co/xHEfLNSarY
— Wall Street Journal Opinion (@WSJopinion) May 9, 2022
West Virginia is not the only state taking action against ESG investing. Texas Attorney General Ken Paxton demanded BlackRock account for its use of state pension funds for environmentalist goals in August.
“Our states will not idly stand for our pensioners’ retirements to be sacrificed for BlackRock’s climate agenda,” Paxton wrote in the letter. (RELATED: How Clean Energy Actually Destroys The Environment And Fuels Abuse)
Florida Governor Ron DeSantis is proposing laws that would challenge what he calls “ideological corporate power” and prevent managers of state funds from using ESG scores in its handling of government money.
Kentucky passed Senate Bill 205 in April of this year, which authorized the Kentucky State Treasurer to identify firms that boycotted fossil fuel industries and required state agencies to stop doing business with them.
Two Texas bills passed in 2021 that banned local jurisdictions from contracting with banks that used ESG investing practices led to the exit of five bond underwriters from the state’s market — JPMorgan Chase, Goldman Sachs, Citigroup, Bank of America and Fidelity. Citigroup has since resumed working in the state.
Texas AG Paxton demands @BlackRock account for its underperforming, potentially illegal ‘ESG’ state pension fund investments…losses ’caused by BlackRock’s quixotic climate agenda.”
https://t.co/vvO0qC0290— Steve Milloy (@JunkScience) August 8, 2022
Almost 90 firms have written to Texas touting their commitment to investing in oil and gas companies after the state’s legislation, the Financial Times reported. The private equity firm Apollo, for instance, said its chief executive Marc Rowan “has publicly stated that Apollo-managed funds will continue to finance fossil fuel companies.”
BlackRock wrote to Texas officials and local trade groups emphasizing its investment in the fossil fuel industry.
“We will continue to invest in and support fossil fuel companies, including Texas fossil fuel companies,” BlackRock said in the letter.
Arkansas State Treasurer Dennis Milligan pulled about $125 million from BlackRock-managed accounts in March.
Utah State Treasurer Marlo Oaks, a vocal opponent of ESG, told the Caller his state is “looking at any number of things,” and at this point, “haven’t ruled out anything.”
BlackRock backed fewer environmental shareholder resolutions this year than last, arguing the resolutions were too prescriptive. But Dan Katz, co-founder of Amberwave, an investment management firm that provides an alternative to ESG investing, said the trend does’t mean BlackRock is any less committed to environmentalist goals than it was.
“It’s not because the asset managers have changed, it’s because the shareholder proposals themselves are becoming much, much, much more radical,” Katz told the Caller. (RELATED: POLL: Americans Overwhelmingly Reject Woke Investing Craze Sweeping Through Corporations)
“I actually don’t see a huge turn in where the financial institutions are in terms of their approach to ESG,” Katz continued. “But I do think there’s potential to turn things over time. And I think it’s really gonna be down to the states and the market to fix this problem.”
Republican Kentucky Rep. Andy Barr, who sits on the House Financial Services Committee, told the Daily Caller he has noticed “increased engagement” from large financial firms on the issue, in what he sees as anticipation of a potential Republican takeover of the House in November.
“Part of this increase in engagement comes in the form of industry leaders insisting that, in fact, they do prioritize investors and shareholders even as they pursue non-pecuniary ESG and climate goals,” Barr said.
Barr said he is considering legislation to directly counter ESG investing.
“I’m partnering with Rep. Rick Allen (R-GA) on the Ensuring Sound Guidance (ESG) Act, which will refocus financial institutions to their core purpose, maximizing financial returns for retail investors.”