BlackRock, JPMorgan say they don't boycott energy companies
BlackRock, JPMorgan, and others tell Texas they don't boycott energy companies Reuters -- BlackRock Inc., JPMorgan Chase Co. and other top financial firms have told a Texas official that they are not boycotting energy companies, because of a request for information that could determine if they can continue to manage state funds.
The money managers are under pressure due to a new Texas law that prohibits state agencies from investing in financial firms that are found to boycott fossil fuel energy companies.
According to the letter signed by BlackRock's head of external affairs, Dalia Blass, the duty requires us to prioritize our clients' financial interests above any commitments or pledges not required by law.
BlackRock had previously lobbied Texas officials, saying it supported the oil and gas industries, but had not cited its fiduciary duty. A BlackRock representative wouldn't say anything further.
BlackRock estimates it runs $24 billion for Texas public pension plans, and cited $8.3 billion of backing for Texas projects like a natural gas utility and a carbon capture pipeline system.
A spokesman for Hegar did not immediately make a statement. His office has previously said that a decision on which companies will boycott the energy sector is likely to be made by September 1.
Financial firms are faced with a growing debate over how investments could be used to address issues like climate change.
In a letter reviewed by the top Wall Street bank JPMorgan, top Wall Street bank said it does not lend in some risky cases like mountaintop coal mining or arctic oil drilling, but it also engages billions of dollars with fossil fuel-based energy companies and green technology companies. The bank said in a letter to Hegar that its decisions are based on ordinary business reasons.
A JPMorgan representative said the letter was in line with past comments that the Wall Street bank has made.
Among more than 20 other companies responses to Hegar's information requests reviewed by Reuters, most say they do not boycott energy companies as defined by Texas law.
John Alban, CEO of Cushing Asset Management of Dallas, said it was a no-brainer.
According to Hegar, McVeigh Capital Management, director of shareholder engagement at Boston-based Reynders, Maria Egan said in a letter to Hegar that the firm does not invest in fossil fuel companies and that about 30% of Texas electricity comes from renewable sources.
Egan wrote that your attempt to create an outlier with your firm for doing exactly what Texas is doing -- investing in the future of energy -- seems shortsighted and irresponsible.