88th LegislatureEnergyStatewide NewsBritish Bank Added to Texas’ Fossil Fuel ‘Boycotters’ List After Prohibition on New Oil and Gas Financing

The British bank is the eleventh company added to Texas' list of fossil fuel "boycotters."
March 20, 2023
The Texas Comptroller of Public Accounts added another financial company to its list of those “boycotting” fossil fuel operations after said firm approved an internal policy of rejecting all new business with oil and gas operations.

HSBC, a British-based entity and Europe’s largest bank, adopted a policy back in December that it would no longer do business with oil and gas operators.

“[W]e will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields,” the policy reads.

The bank added that it will maintain financing for clients who’ve committed to the “net zero by 2050” goal.

The policy continues, “If a transition plan is not produced or if, after repeated engagement, is not consistent with our targets and commitments, we won’t provide new finance, and may withdraw existing financing if appropriate.”

The Texan Tumbler

In 2021, the Texas Legislature passed Senate Bill (SB) 13, which commanded the comptroller to maintain a list of entities with fossil fuel boycotting or sanctioning policies and remove any state pension dollars from them. The first version of the list was released last August and featured 10 companies, BlackRock chief among them. The addition of HSBC brings the total to 11.

“This is significant given HSBC’s status as Europe’s largest bank, but it should not be surprising,” Comptroller Glenn Hegar said. “HSBC’s new energy policy is a prime example of a broader movement in the financial sector to push a social agenda and prioritize political goals over the economic health of their clients. HSBC’s policy clearly makes the firm a suitable candidate for listing under Texas law.”

Hegar’s ruling now gets the ball rolling on divesting any holdings state pensions have with HSBC, a process that can take a few weeks.

“HSBC does not consider itself to be a company which ‘boycotts’ financing of energy companies,” the bank told The Texan. “HSBC seeks a balanced approach in the implementation of its net zero commitment, with the primary aim being to support our customers in the transition from a high-carbon to a low-carbon economy.”

The spokesman added that HSBC will continue services with clients who “take an active role in the energy transition.”

“[E]ngaging with our clients on their transition plans lies at the heart of our approach.”

BlackRock has maintained a similar position, pointing to its billions in oil and gas investment, including in Texas, while its CEO Larry Fink touts decarbonization around the globe. But where BlackRock has been more passive in its written comments on an energy transition, HSBC is coming out strong on its directive.

The Legislature’s purpose of SB 13 was to counter the growing movement in the financial world to move capital away from businesses or operations that do not toe the line of progressive orthodoxy on environmental and social issues — known as the Environmental, Social, and Governance (ESG) movement. It was also fashioned to protect the state’s vaunted oil and gas industry, responsible for hundreds of thousands of jobs and billions in state taxes.

“HSBC’s policies threaten Texas jobs, our state economy and our national security, and the tax dollars of hard-working Texans should not be leveraged to force policies that undermine Texas’ fiscal health and stability,” Hegar added. “The result of this blind push to elevate ESG above all else is greater risk to the health of our global economy, and it is not just confined to those firms that choose to pursue this ill-defined and opaque investment trend.”

SB 13 was only the first stab GOP legislators will take at ESG. Momentum is already building to prohibit “politically-driven” investing and ban insurers from implementing “political shareholder proposals.”

According to the Dallas Morning News, the state’s Teachers Retirement System removed and reinvested half a billion dollars in response to the initial list.

The comptroller’s list is still running and will be updated periodically.


Disclosure: Unlike almost every other media outlet, The Texan is not beholden to any special interests, does not apply for any type of state or federal funding, and relies exclusively on its readers for financial support. If you’d like to become one of the people we’re financially accountable to, click here to subscribe.

Get “KB's Hot Take”

A free bi-weekly commentary on current events by Konni Burton.

Brad Johnson

Brad Johnson is a senior reporter for The Texan and 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.