By: Ken Chase.
Estimated reading time: 2 minutes
In a recent response to a request for information from Texas Comptroller Glenn Hegar, the asset management firm Blackrock denied boycotting energy companies. According to a report by Reuters, similar denials have been issued by companies like JPMorgan, Cushing Asset Management, and roughly 20 other financial firms.
Those denials could help to determine whether Blackrock, the world’s largest asset management firm, and other major financial entities are allowed to continue to play a role in the management of Texas state funds. A law passed in 2021 prevents the state from investing funds with any firms that actively boycott oil, gas, and other fossil fuel companies. The Texas Comptroller is currently in the process of compiling a list of financial firms that maintain such boycotts.
Texas is just one of several states to pass legislation that bars financial firms that refuse to do business with energy companies from managing state funds. States like West Virginia, Louisiana, and West Virginia have either already passed similar legislation or are in the process of doing so. Policymakers in those states have argued that the effort to discourage financial firms from boycotting energy sector companies is designed to discourage discrimination against those traditional sources of energy.
Earlier this year, Texas Lieutenant Governor Dan Patrick had warned that efforts to boycott and divest from energy companies threatened to “destroy the oil and gas industry and destabilize the economy worldwide.” He also asserted that Blackrock’s private statements about its commitment to the energy sector in Texas were at odds with the firm’s public commitment to pushing energy companies to achieve the asset manager’s net zero goals.
Currently, Blackrock manages an estimated $24 billion in Texas public pension funding. The firm is also one of the better-known proponents for initiatives aimed at reducing greenhouse gas emissions. Despite that fact, Blackrock head of external affairs Dalia Blass said, “our investment decisions are governed strictly by our fiduciary duty to clients, and that duty requires us to prioritize our clients’ financial interests above any commitments or pledges not required by law,”