Treasurer sends letters to six major investment firms, accusing them of boycotting fossil fuels


The state treasurer’s office has sent letters to six of America’s largest investment firms, warning them they may not be eligible for some West Virginia contracts because of their environmental policies.

The letters were sent to BlackRock Inc., Goldman Sachs, JPMorgan Chase, Morgan Stanley, US Bancorp and Wells Fargo. MetroNews and other news outlets received the letters through public records requests.

The warnings came after the passage this year of Senate Bill 262, directing the treasurer to maintain a list of financial institutions that avoid investments in fossil fuel companies, which could lead to decisions to withhold deposits from the state of these bankers.

“Earlier this year, our Office proposed, and the Legislature passed, Senate Bill 262 to push back against unjust discrimination against our coal, oil and natural gas industries by the financial sector in framework of the so-called ‘Environmental, Social and Governance’ or ‘ESG’ investment movement,” Moore said earlier this week. “We have now demonstrated that we are serious about enforcing this law. .”

The law and the letters give each company 30 days to respond and provide “information demonstrating that it is not engaged in a boycott of energy companies.” The letters warn that each company may be rendered “ineligible to enter into or remain in banking contracts with the State of West Virginia.”

“A financial institution placed on the restricted financial institutions list will be removed from said list if the financial institution ceases to engage in activities that boycott energy companies and provides information to WVSTO, in writing, demonstrating that it has ceased any such activity.”

The letters to each company do not cite any specific examples of statements or company policies that led to their inclusion.

The new law defines a ‘boycott’ as refusing to do business with a company without a ‘reasonable business purpose’ – particularly where the company seeking funding does business in fossil fuel markets or does business with other other companies involved in fossil fuels.

A reasonable business objective is then defined as promoting the financial success or stability of a financial institution, mitigating risk for a financial institution, complying with legal or regulatory requirements, or limiting the liability of an institution. financial.

The law indicates that the treasurer can rely on information such as certification from a financial institution that it is not involved in a boycott of energy companies, publicly available statements or information made by the financial institution or its principal representatives or information published by a state or governmental entity. .

The potential restrictions would apply to government banking contracts. Treasurer’s offices manage approximately $18 billion in state government revenue on an annual basis.

Riley Moore

“In West Virginia, we are an energy state. We produce coal, gas and oil. And this ESG movement in its current form is truly an existential threat to our jobs, our economy, and our tax revenues. We generate hundreds of millions of dollars in tax revenue from coal and gas specifically,” Moore said during a recent roundtable with the State Financial Officers Foundation.

“So for me, I had to do something to start fighting against that. We felt like we had a clear conflict of interest for financial institutions to manage our dollars who, at the same time, are trying to diminish our dollars and destroy our industries.

Earlier this year, BlackRock chief Larry Fink wrote in an annual letter to business leaders that the company has a fiduciary responsibility to engage with businesses on climate change. But the letter explicitly stated that BlackRock itself was not divesting from carbon producers.

“Diving out of entire sectors – or simply moving carbon-intensive assets from public to private markets – will not bring the world back to net zero. And BlackRock does not pursue divestment from oil and gas companies as a policy. Fink wrote in the letter. “We have some clients who choose to divest their assets while other clients reject this approach.”

He continued: “Foresighted companies across a wide range of carbon-intensive sectors are transforming their businesses and their actions are a critical part of decarbonization. We believe that the companies leading the transition represent a vital investment opportunity for our clients and that directing capital to these phoenixes will be key to achieving a net zero world.

BlackRock has maintained that it has a fiduciary responsibility to protect customer money and safeguard customer investments by openly discussing the financial effects of climate change. In other words, BlackRock describes investment priorities as a reasonable business objective.

“We focus on sustainability not because we are environmentalists, but because we are capitalists and trustees for our customers. This requires understanding how companies adapt their activities to the massive changes that the economy is undergoing. As part of this goal, we ask companies to set short-, medium-, and long-term goals for greenhouse gas reduction,” Fink wrote.

Moore has been a vocal critic of policies that flow from environmental, social and governance policies.

This month, Moore wrote a commentary for the Wall Street Journal’s opinion section with Vivek Ramaswamy, the author of “Woke Inc: Inside Corporate America’s Social Justice Scam.”

The article focuses on the power of large funds like BlackRock, State Street and Vanguard to make investment decisions despite the passive role that individual investors can play.

“The aggregation of capital in the hands of three corporations – and the associated power to shape the social agendas of corporate America – is an anticompetitive problem that demands a competitive market solution,” Ramaswamy and Moore wrote.

The article describes Moore’s actions as “steps to sever ties with major asset managers who fail to advance the interests of his state’s citizens.” This is a type of market response: state treasurers are not market regulators, but they are market players who allocate capital on behalf of their constituents. Moving money has a greater impact than recovering the right to vote.


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