GOP lawmakers accuse investment firms of breaking a law that prohibits divesting from oil and gas

Sign up for The Brief. This is a daily newsletter that keeps readers up to date on the most important Texas news.

Republican lawmakers are questioning investment firms about their move to climate-friendly portfolios, which recommends state officials and retirees cut ties with companies funded by fossil fuels. Because it’s currently illegal in Texas.

Lawmakers on the Texas Senate State Affairs Committee said at a hearing in Marshall on Thursday that the companies are not complying with Senate Bill 13, which will pass in 2021. The bill prohibits states from contracting or investing in companies that divest from oil and natural gas. gas and coal companies.

Controversial investment firms include BlackRock, State Street Global Advisors and Institutional Shareholder Services.

Investment firm leaders are called upon to address their role in initiatives like Climate Action 100+, which strive to ensure that the largest corporate greenhouse gas emitters take action on climate change. I was. They were also asked about their participation in federal rulemaking on environmental, social, and governance (ESG) standards and whether that policy could impact state public pensions.

Vanguard had previously been asked to attend a hearing, but the Financial Times reported this week that that changed with the company’s recent withdrawal from the Net Zero Asset Managers initiative.

Senator Brian Hughes, a Republican Mineola who chairs the committee, said lawmakers were concerned that investment firms were encouraging clients to cut financial support for oil and gas companies.

“It’s about family. It’s about national security,” Hughes said. “We have learned that foreign governments are involved in these decisions and that other major state agencies are also using Texas resources to influence investment decisions. We are here to shed light on that.”

The legislation, introduced by state senators Bryan Birdwell, R-Glanbury, along with four other Republican senators during the last legislative session, calls for divestments to help fossil fuel companies commit to higher environmental standards. defined as refusing to do business with fossil fuel companies because they do not than expected by federal and state law. If companies withdraw from investing in oil and gas, states can bar them from state contracts.

Texas funds identified in the bill include the $46 billion Texas Permanent School Fund, the largest K-12 fund in the United States. The Texas Teacher Retirement System, which manages approximately $165 billion in investments. The Texas Employee Retirement Plan and the Texas Municipal Retirement Plan each manage $31 billion.

Republican Blenheim Senator Lois Kolkhorst said at the hearing that it may be time to find other investors, a move other states have made. Earlier this month, Florida withdrew about $2 billion from BlackRock, making it the largest move of its kind by an individual state to cut or “boycott” investments from energy and fossil fuel companies. hit the house.

Hughes said he, along with other lawmakers, spoke with representatives of the Texas Teacher Retirement System earlier this year and informed them of the Institutional Investor Service’s recommendation for investing in the development of fossil fuel-based energy projects in Texas. rice field.

Republican Houston Senator Paul Bettencourt said the investment bank’s decision to join the Climate Action 100 was a bad step for the company and that the environmental benchmarks on their website leaned toward “activists.” He said he was not an “agnostic”.

Bettencourt asked investment firms whether participating in environmental initiatives would bias them in making decisions and making recommendations to clients.

Daria Blas, Senior Managing Director and Head of External Relations, BlackRock Global Executive Committee, said:

Environmental activists called Thursday’s hearings “the political theater of fossil fuel concerns.”

Casey Harrell, senior finance strategist at watchdog group The Sunrise Project, said in a statement that investment firms “must confront the Republican Party’s toxic culture wars.”

“These are the world’s largest asset managers, and their actions affect the global economy,” said Harrell. “Right now, when the world needs meaningful and sensible climate action, they can’t bow down to certain political parties in the United States.”

The Sunrise Project is pushing big financial companies to take greater responsibility for climate change. Environmentalists have long called on Wall Street and university endowments to stop investing in fossil fuels, and several US universities have responded.

“Texas Republicans would be wise to remember that the market is increasingly moving towards holding companies accountable for climate change risks,” said the Sierra Club’s fossil-free finance campaign. Senior Campaign President Jesse Waxman said in a statement.

It’s unclear if more laws will be enacted to stop companies from staying away from the oil and gas industry, but Hughes said he will continue to hold investors accountable and expose them if they don’t follow the law.

Source link

Leave a Reply

%d bloggers like this: