Texas Comptroller Remains Skeptical of Financial Institutions' Claims to Distance Themselves from ESG Policies
The Texas comptroller, Glenn Hegar, is expressing skepticism towards financial institutions that have recently announced their withdrawal from Environmental, Social, and Governance (ESG) investing policies. J.P. Morgan Asset Management and State Street Global Advisors have both announced their withdrawal from the investor-led initiative known as Climate Action 100+. This initiative aims to ensure that the world's largest corporate greenhouse gas emitters take actions to address climate change. However, the Texas comptroller remains unconvinced by these institutions' claims.
The comptroller has been actively adding financial companies to a list of those boycotting the oil and natural gas industry through the implementation of ESG policies. Currently, there are fifteen companies and 353 publicly traded investment funds on this list, including Blackrock, Inc. This move by the comptroller is in line with Texas Government Code Chapter 809 divestment provisions, which prohibit state governmental entities from investing in these companies and investment funds.
Hegar views the recent distancing of these institutions from Climate Action 100+ as a positive development. He believes it is a testament to his efforts to bring transparency to the financial sector and foster an honest conversation around ESG investing. However, he remains skeptical due to the contradictory information provided by these firms to different states. Hegar points to various statements from companies about their continued engagement in climate-related initiatives despite their withdrawal from Climate Action 100+.
The comptroller is dedicated to enforcing Texas laws and ensuring that Texas tax dollars are not invested in a way that harms the state's economy or threatens key industries and jobs. His staff continues to assess the policies of companies on the current list and examine the listing process.
Texas is known as the oil and natural gas capital of the United States, with record-breaking production, exports, refining outcomes, crude oil supply, and tax revenue contributions. The state is also a leader in emissions reductions, with the Permian Basin in west Texas achieving a record low methane intensity in 2022 while simultaneously reaching record production levels. Producers in the industry have reduced methane emissions intensity by almost 85% between 2011 and 2022. Todd Staples, president of the Texas Oil & Gas Association, argues that American producers have a strong commitment to safety and environmental protection in their production, transportation, and refining processes.
Analyst comment
Positive news: The Texas comptroller remains skeptical of financial institutions claiming to withdraw from ESG investing policies. This supports the state’s stance on protecting the oil and gas industry. The industry has shown significant reductions in emissions and a commitment to safety and environmental protection. The market is expected to remain stable with continued support for Texas’ key industries and jobs.
