BlackRock, JPMorgan, others tell Texas they don’t boycott energy companies

May 19 (Reuters) – BlackRock Inc (BLK.N), JPMorgan Chase & Co (JPM.N) and different prime monetary corporations have informed a Texas official they usually are not boycotting energy companies, responding to a request for information that would decide if they are capable of proceed to handle state funds.

The cash managers are below stress from a brand new Texas regulation that prohibits state businesses that make investments funds from investing in monetary corporations discovered to boycott fossil gasoline energy companies.

In a May 13 letter obtained by Reuters News below a public data request, BlackRock, the world’s largest asset supervisor, acknowledged to Texas Comptroller Glenn Hegar that it has joined numerous efforts to chop greenhouse fuel emissions just like the high-profile Net Zero Asset Managers Initiative. learn extra

“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,” in accordance with the letter, signed by BlackRock’s head of exterior affairs, Dalia Blass.

BlackRock had beforehand lobbied Texas officers, saying it supported the oil and fuel industries, however had not cited its fiduciary obligation. learn extra A BlackRock consultant declined to remark additional.

BlackRock estimated it runs $24 billion for Texas public pension plans, and cited $8.3 billion value of backing for Texas tasks like a pure fuel utility and a carbon seize pipeline system.

A spokesman for Hegar didn’t instantly remark. His workplace has beforehand mentioned a call on which companies boycott the energy sector is probably going by Sept. 1.

Financial corporations face a rising debate over how investments is likely to be used to deal with points like local weather change. learn extra

In one other letter reviewed by Reuters, prime Wall Street financial institution JPMorgan mentioned it doesn’t lend in some dangerous circumstances like mountaintop coal mining or arctic oil drilling, however mentioned it engages billions of {dollars} with fossil fuel-based energy companies and inexperienced expertise companies alike. Its selections “are based on ordinary business reasons,” the financial institution mentioned in a May 13 letter to Hegar.

A JPMorgan consultant mentioned the letter was in step with previous feedback the Wall Street financial institution has made.

Among greater than 20 different firm responses to Hegar’s information requests reviewed by Reuters, most say they don’t boycott energy companies as outlined by Texas regulation.

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

But Maria Egan, director of shareholder engagement at Boston-based Reynders, McVeigh Capital Management, mentioned in a letter to Hegar that the agency doesn’t spend money on fossil gasoline companies and that about 30% of Texas electrical energy now comes from renewables.

“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,” Egan wrote.

Reporting by Ross Kerber; Editing by Leslie Adler

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