JPMorgan, BlackRock, And Others Inform Texas They Do Not Blacklist Energy Firms – – Daily Cryptocurrency and FX News

BlackRock Inc  in New York

JPMorgan Chase & Co (JPM.N), BlackRock Inc (BLK.N), and other major financial firms have told a Texas official they are not blacklisting energy companies. They spoke while responding to a request for information that could establish if they can continue handling state funds.

The fund managers are facing pressure from a new Texas law that restricts state agencies that invest funds from investing in financial firms found to ban fossil fuel energy companies.

In a May 13 letter acquired by Reuters News under a public record request, BlackRock, the world’s biggest asset manager, admitted to Glenn Hegar Texas Comptroller that it has been part of several efforts to reduce greenhouse gas emissions like the high-profile Net Zero Asset Managers Initiative.

According to the letter, signed by Dalia Blass, BlackRock’s head of external affairs:

“Notwithstanding, 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.”

BlackRock had formerly persuaded Texas officials, saying it backed the oil and gas industries, but had not mentioned its fiduciary duty. BlackRock approximated that it manages $24 billion for Texas public pension plans and cited $8.3 billion worth of support for Texas projects like a carbon capture pipeline system and a natural gas utility.

Hegar’s spokesman did not immediately comment. His office has previously said an order on which firms blacklist the energy sector is likely by September 1, 2022. Financial firms face an extending debate over how investments could be used to tackle issues like climate change.

In another letter analyzed by reporters, top Wall Street bank JPMorgan said it does not give loans in some risky cases like arctic oil drilling or mountaintop coal mining. But, it said that it engages billions of dollars with green technology companies and fossil fuel-based energy companies alike. Its agreements “are based on ordinary business reasons,” the bank said in a May 13 letter to Hegar.

A representative for JPMorgan said the letter aligned with previous comments made by the Wall Street bank. Among responses from more than 20 other companies to Hegar’s information requests reviewed by Reuters, the majority say they do not blacklist energy companies as determined by Texas law.

“Hell no,” responded John Alban, CEO of Cushing Asset Management of Dallas, to the boycott question.

Nevertheless, the director of shareholder engagement at Boston-based Reynders, McVeigh Capital Management, Maria Egan said in a letter to Hegar that the firm does not support fossil fuel companies and that around 30% of Texas electricity is now acquired from renewables.

Egan wrote:

“Your attempt to create an outlier with our firm for doing exactly what Texas is doing – investing in the future of energy – seems shortsighted and irresponsible.”

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