Energy9 Companies Allegedly Boycotting Fossil Fuels Have Not Responded to Texas Comptroller’s Inquiry

When asked if they hold policies of boycotting oil and gas development, one company said "Hell no."
May 23, 2022
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The 60-day deadline come and gone, 9 of the 19 financial companies accused of harboring oil and gas-boycotting policies have not responded to the state’s inquiry.

In March, Texas Comptroller Glenn Hegar sent inquiries to 19 financial companies in which state pension funds are invested in some form or fashion. Those companies were identified by the comptroller’s office in conjunction with its Senate Bill (SB) 13 investigation. The bill prohibits state money from going to companies with such fossil fuel-boycotting policies. Ultimately, the office will narrow down a list of companies running afoul of SB 13 and will then begin the process of divesting state pension funds from their holdings.

By the 61st day of the letter’s receipt, May 17, seven of the companies had responded to the office’s slate of questions. Those who have not include:

  • BNP Paribas
  • Credit Suisse Group AG
  • Danske Bank A/S
  • Invesco Ltd.
  • Jupiter Fund Management PLC
  • Nordea Bank Abp
  • Sumitomo Mitsui Trust Holdings, Inc.
  • Svenska Handelsbanken AB
  • Swedbank AB

The comptroller’s office said that the deadline is a soft one and that any responses received after the 61st day will still be accepted. However, as the office said in its original letter, these companies which did not reply will be treated as if they do harbor fossil fuel-boycotting policies.

They also sent a second batch of over 150 letters to other companies judged to have oil and gas-boycotting investment fund options. Some of those companies have already supplied their responses to the comptroller’s office.

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Among the respondents from the first batch of letters, investment titan BlackRock tops the list of those receiving the most attention. In January, Lt. Governor Dan Patrick publicly accused BlackRock of fossil fuel divestment practices and asked the comptroller to place the company “at the top of the list” of those primed for state pension divestment. BlackRock has steadfastly denied these accusations — contending both that it has money invested in oil and gas companies, which it does, and that its push toward net-zero emissions goals does not violate SB 13.

BlackRock manages $24 billion in state and local pension plans in Texas and says that, overall, the company has $115 billion invested in Texas energy companies. In response, BlackRock provided a list of Texas oil and gas companies it has money invested in.

They include $280 million in Centric Infrastructure Group, a natural gas utility company based in The Woodlands; $750 million in Valero and Navigator Energy Services to build a carbon-capture pipeline system; $40 million in the Whitewater Whistler Pipeline in Texas; $55 million in Triple Crown Resources, an upstream oil and gas company based in the Permian Basin $20 million in Laredo Energy, based in the Eagle Ford Shale region.

“As a public company, we have set our own emissions reduction goals for our own corporate operations,” BlackRock’s response states. “These goals do not pertain to the management of investments or to investment decisions we make on behalf of our clients.”

“Moreover, in no way are any of these investment decisions motivated by intentions to inflict economic harm, penalize particular issuers or sectors of the economy, or limit commercial relations with companies because they are energy companies.”

An emerging component of this growing Environmental, Social, and Governance trend is the role of financing, with some banks and insurers refusing to underwrite loans to oil and gas companies. While each proposal failed, one of Texas’ state pension systems voted by proxy in favor of prohibiting financing to fossil fuel companies earlier this month.

Asked about this component by the comptroller, JP Morgan & Chase said that it rejects any loan applications for certain coal mining operations along with Arctic oil and gas development. They also said that the company uses an “assessment of [their] clients’ emissions and decarbonization plans” when considering additional transactions for those entities.

JP Morgan concluded, like BlackRock, that it is not violating SB 13’s tenets.

Another company — Reynders, McVeigh Capital Management, among those in the second batch — took a different tact, leaning into the divestment accusation and wearing it as a badge of honor.

“On behalf of our clients and the long-term health of our planet, we choose not to invest in fossil fuel companies,” wrote Maria Egan, vice president of the company. Referring to the influx of renewable electricity generation in Texas, she added, “Instead, like the State of Texas, we invest in cleaner sources of energy. We applaud Texas for becoming the #1 renewable energy generator in the country.”

Egan returned fire, calling the comptroller’s inquiry “shortsighted and irresponsible,” and concluded, “As a state that prides themselves on deregulation, promoting competition and optionality through consumer choice, it appears imprudent to have received this letter which is the opposite of what Texas is in fact doing.”

One company among those in the second batch of letters, Cushing Asset Management, responded to the question about whether they are in violation of SB 13 with a succinct “Hell no.”

The final list of oil and gas divesters will be finalized later this year, at which point the comptroller will begin the process of divesting its own money from those in violation of state law.

Editor’s Note: This article has been updated to reflect new responses from UBS Group AG and NatWest Group received by the comptroller, reducing the number of outstanding replies to 10. It has also been updated to reflect that Wells Fargo submitted its response on May 18, which was not included among the records provided to The Texan.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.