December 8, 2023

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Texas official tests financial firms on fossil fuel investments

Texas official tests financial firms on fossil fuel investments

MARCH 16 (Reuters) – The Texas Comptroller of Texas has questioned 19 companies to clarify their investment policies on fossil fuels, the office of Texas comptroller Glenn Hegar said on Wednesday, illustrating the breadth of the review that could see companies lose state pension mandates.

Letters have been sent to companies including BlackRock Inc, (BLK.N)JPMorgan Chase & Co., (JPM.N) Wells Fargo & Co., among others, “may boycott the fossil fuel industry,” according to a statement and other materials sent by a spokesperson for the state’s Republican official.

Even if companies currently make investments in oil and gas today, Hegar said in the statement, some might “sell hope for a ‘green’ tomorrow with promises of abandoning or reducing” exposure to fossil fuels.

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Another round of letters will soon be sent to more than 100 other publicly traded investment firms that “appear to have one or more funds to boycott fossil fuels,” according to Hegar’s letter.

Under a new state law, Hegar will draw up a list of financial companies that have been shown to boycott fossil fuels. These companies can then be prevented from managing government pension funds. Read more Hegar told companies they have 60 days to provide details.

At stake is access to state pension funds like the $197 billion Texas Teachers’ Retirement System, which is about $2.5 billion with BlackRock for example.

Large investors face balancing measures as some pension funds and endowments move to dispose of fossil fuel stocks due to climate change concerns. However, higher energy prices helped keep other investors in stocks. Read more

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A spokesman said Hegar could not be reached for further comment.

Representatives for BlackRock, JPMorgan and Wells Fargo did not comment. In an earlier letter, BlackRock argued to Texas officials that as a long-term investor in fossil fuel companies, “we want to see these companies succeed and thrive.”

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(Reporting by Ross Kerber) Editing by Bernard Orr

Our criteria: Thomson Reuters Trust Principles.