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Texas comptroller sends letter to state money managers over ESG concerns (2023)
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Texas State Comptroller Glenn Hegar (R) sent a letter last week to state money managers arguing that they were not doing enough to distance themselves from ESG asset management companies (AMCs) and directing them to cut ties with institutions on the state’s boycott list:
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Texas Comptroller Glenn Hegar is stepping up his battle against so-called sustainable investing, telling state money managers that they haven't done enough to cut ties with BlackRock Inc. and other financial firms that he says boycott the oil and gas industry. Hegar sent letters late Wednesday to five Texas government-employee pension funds and an entity that manages money for the public school systems, “strongly” encouraging them to sever all relationships with companies on his office’s divestment list, according to copies of the missives seen by Bloomberg News. The move follows a 2021 law that requires state entities to sell their shares in financial companies or investment funds that limit business with the fossil-fuel industry. In August, Hegar released a list of 10 companies including BlackRock and UBS Group AG and more than 300 individual funds that he says discriminate against oil and gas. The demands laid out by Hegar increases pressure on state agencies that manage hundreds of billions of dollars in assets to completely cut off the firms on the boycott list. While the state firms indicated they didn’t own direct stakes in the financial companies, Hegar said that an examination of their holdings and business relationships showed some still had investment funds issued by the companies or were paying the firms for services such as analytics or risk management. His findings indicate some uncertainty about what exactly is required to comply with the law, which carves out exceptions for some private-equity investments and allows the state funds to seek an exemption if severing the ties would violate their fiduciary duty to pensioners. “We can play all the nuances we want – that keeps the lawyers in their job,” Hegar, a Republican serving his third term, said in an interview. “But the simple matter is that entities that boycott oil and gas should not be doing business with the state of Texas.” Bloomberg reported Wednesday that the Teacher Retirement System of Texas uses BlackRock to manage about $4 billion of its assets — or about 2.2% of the $179.7 billion total. A TRS spokesman said then that the money manager was following state law about the proper divestments.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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