BlackRock, JPMorgan and others tell Texas they’re not boycotting energy companies

Money managers are under pressure from a new Texas law that prohibits state agencies that invest funds from investing in financial companies known to boycott fossil fuel companies.

In a May 13 letter obtained by Reuters News through a public records request, BlackRock, the world’s largest asset manager, admitted to Texas Comptroller Glenn Hegar that it has joined various efforts to reduce greenhouse gas emissions, such as the highly publicized Net Zero Asset Managers Initiative.

“Notwithstanding, our investment decisions are strictly governed by our fiduciary duty to our clients, and this duty requires us to put the financial interests of our clients first before any commitments or promises not required by law,” according to the letter, signed by BlackRock’s head of external affairs, Dalia Blass.

BlackRock had previously lobbied Texas officials, saying it supported the oil and gas industries, but did not cite its fiduciary duty. A BlackRock representative declined to comment further.

BlackRock estimated it manages $24 billion for Texas public pension plans, and cited $8.3 billion in support for Texas projects such as a natural gas utility and a pipeline system carbon capture.

A spokesperson for Hegar had no immediate comment. His office has previously said a decision on companies boycotting the energy sector is likely by September 1.

Financial societies are facing a growing debate about how investments could be used to address issues such as climate change.

In another letter reviewed by Reuters, Wall Exchange’s main bank, JPMorgan, said it does not lend in certain risky cases like mountain coal mining or oil drilling in the Arctic, but said that It was engaging billions of dollars with fossil fuel-based energy companies and green technology companies. Its decisions “are based on ordinary business reasons”, the bank said in a May 13 letter to Hegar.

A JPMorgan representative said the letter was consistent with the bank’s earlier comments to the Wall Exchange.

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Of more than 20 other company responses to Hegar’s information requests reviewed by Reuters, most say they do not boycott energy companies as defined by Texas law.

“Of course not,” replied John Alban, CEO of Dallas-based Cushing Asset Management, when asked about the boycott.

But Maria Egan, director of shareholder engagement at Reynders, McVeigh Capital Management, based in Boston, said in a letter to Hegar that the company does not invest in fossil fuel companies and that about 30% of the Texas electricity now comes from renewable energy.

“Your attempt to aberrate our society for doing exactly what Texas does – investing in the energy future – seems short-sighted and irresponsible,” Egan wrote.