BlackRock has criticized the Texas Comptroller’s decision to exclude the fund manager, together with nine other financial institutions, from state contracts as “opportunistic”, “anti-competitive” and “bad for [state] business”.
On August 24, Texas Comptroller Glenn Hegar listed 10 financial institutions, including BNP Paribas, Credit Suisse Group, Danske Bank, Jupiter Fund Management, Nordea Bank, and Schroders, – all of which face divestment by state pension funds for alleged energy firm “boycotting.”
Hegar’s blacklist is linked to a 2021 Texas law that criticized ESG investing for potentially hurting the fossil fuel industry while damaging long-term shareholder value.
Mark McCombe, BlackRock’s senior managing director, U.S., told The Financial Times that “trying to stop a U.S. company from doing business in its own backyard is bad for business.”
“We have never turned our back on Texas oil and gas companies,” McCombe added.
Hegar has defended his actions, stating the exclusion process was “open and transparent.”
Both BlackRock and Credit Suisse have stated they will be engaging with both the state and its retirement systems to find ways to avoid being subject to exclusion from state financial contracts.
Texas is only the latest in a long line of U.S. states to fight back against ESG investing. In July, West Virginia barred five fund managers for boycotting energy firms, while Arkansas wrote to BlackRock criticizing its involvement in shareholder coalitions aimed at enhancing corporate climate accountability.