Another company alters ESG policy to comply with Texas law | Texas

(The Center Square) – Another company, S&P Global Ratings, has altered its ESG policy to comply with Texas law.

The Office of the Attorney General announced S&P Global Ratings changing its environmental, social, and corporate governance (ESG) policies was “a victory for the State of Texas and consumers nationwide.”

S&P Global Ratings recently announced it “remains committed to providing the market with transparency on how and when environmental, social and governance (ESG) factors influence our assessment of creditworthiness. However, effective immediately, we are no longer publishing new ESG credit indicators in our reports or updating outstanding ESG credit indicators.”

It also said that not publishing its credit indicators “does not affect our ESG principles criteria” or its “research and commentary on ESG-related topics, including the influence that ESG factors can have on creditworthiness. We will be updating our external websites and platforms to reflect this change.”

This led some to question whether S&P Global was really dropping its ESG policies.

The OAG’s office says S&P Global announced it was no longer publishing ESG credit indicators after the OAG made numerous efforts “to combat the ESG investment doctrine that aims to weaponize the financial sector for ideological goals related to environmental extremism, racial and gender identity politics, and more.”

In September 2022, Texas and a coalition of states sent a Civil Investigative Demand to S&P Global requesting it provide information about its incorporation of ESG into its credit ratings analysis. Nearly one year later, it announced it was changing its ESG policy.

S&P Global is not the only company Texas has confronted. Earlier this year, Texas and 21 attorneys general ordered companies in New York and California to halt their ESG policies, arguing they violated federal and state law and were harming their states’ retirees.

And in January, Attorney General Ken Paxton sued the Biden administration over its federal ESG policy. He argued the plan was an “illegal attempt to expose workers’ retirement accounts to ESG investing, putting their financial futures at risk by allowing asset managers to consider non-financial factors when investing client funds.”

“In recent years, the financial industry has been pressured to use their enormous power over consumers to advance fringe causes that Americans do not agree with,” First Assistant Attorney General Brent Webster said in a statement. “Texas is proud of our litigation and investigations that have obviously caused companies to think twice about becoming an arm for political activism, and we will continue to monitor companies closely.”

Texas Comptroller Glenn Hegar recently announced that his office identified an 11th company, HSBC Holdings, that is in violation of state law for boycotting the oil and natural gas industry and promoting ESG policies.

The 11 companies are Blackrock, Inc., BNP Paribas SA, Credit Suisse Group AG, Danske Bank A/S, Jupiter Fund Management PLC, Nordea Bank ABP, Schroders PLC, Svenska Handelsbanken AB, Swedbank AB, UBS Group AG, and HSBC Holdings.

In a recent statement, Hegar reminded Texas public investment entities subject to the law to “avoid contracting with, and divest[ing] from, these companies unless they can demonstrate this would conflict with their fiduciary duties.”

Gov. Greg Abbott signed SB 13 into law in 2021 after state lawmakers expressed concerns that prominent financial institutions and investment funds were targeting the Texas oil and gas industry to financially penalize them in favor of alternative energy. The law prohibits certain state agencies from investing funds in financial companies taking “any action that is, solely or primarily, intended to penalize, inflict economic harm on or limit commercial relations with [an energy company that] does not commit or pledge to meet environmental standards beyond applicable federal and state law.”

Abbott has taken several actions to protect the industry, most recently signing bills into law. When sharing an article published by The Center Square on social media, he said, “I will never back down from defending the mighty Texas oil and gas industry. Texas energy powers the nation and the world. Laws I signed this year will ensure Texas remains America’s #1 energy producing state.”

In 2022, the industry paid a record $24.7 billion into state coffers, or roughly $67 million a day in taxes to fund the Economic Stabilization Fund (the state’s Rainy Day Fund), the Permanent School Fund (PSF) and the Permanent University Fund (PUF).

Since 2007, the Texas oil and natural gas industry has paid over $203.4 billion in state and local taxes and state royalties, since the Texas Oil and Gas Association began compiling the data. The data “excludes the hundreds of billions of dollars in payroll for some of the highest paying jobs in the state,” TXOGA notes, as well as “taxes paid on office buildings and personal property, and the enormous economic ripple effect that benefits other sectors of the economy.”