Lone Star State's Leadership Started, Continues to Lead ESG’s Demise
AUSTIN, Texas (Texas Insider Report) — Just a few years ago, Environmental, Social and Governance (ESG) investment criteria reigned supreme across Wall Street firms and pensions systems throughout the U.S. While some companies are just waking up to the reality that ESG is a losing bet, Texas has been ahead of the curve.
Recognizing that ESG often runs afoul to the underlying fiduciary duty of money managers, the Texas Legislature passed Senate Bill 13 in 2021 barring firms deemed to boycott energy companies from entering into state contracts.
Comptroller Glenn Hegar – the man tasked with maintaining the list of barred companies – deserves enormous credit for his work on this issue. As he and Texas led the charge, states and companies alike have taken notice.Recently, a non-profit group focused on encourage these sort of ESG related actions and votes, ShareAction, released it’s 2024 “Voting Matters” report, analyzing 70 of the world's largest asset managers’ votes on 279 environmental and social shareholder proposals, covering the 2024 proxy voting season. ShareAction’s report found that only 1.4%% of the 279 proposals gained a majority support from the analyzed asset managers – down from 21% in 2021.
The continual decrease in the backing of environmental and social shareholder resolutions has garnered significant attention over the last few years, especially as the “Big Three” asset managers, Vanguard, BlackRock and State Street, have substantially pared down their support. In ShareAction’s table ranking asset managers’ support for the 279 shareholder proposals, State Street ranked 63rd, BlackRock ranked 67th and Vanguard ranked 70th – dead last.
Interestingly, other firms on Comptroller Hegar’s list of banned financial institutions scored much higher in support of ESG causes. For example, BNP Paribas ranked second, HSBC ranked 17th and UBS ranked 39th. All support environmental and social resolutions at higher rates than their aforementioned peers.
- READ MORE: Hegar Blasts Biden for Forcing Fund Managers to Put Environmental Agenda Ahead of Customer's Retirement Needs
- President Biden is once again using unelected bureaucrats to push radical Environmental, Social & Governance (ESG) Agenda, undermine Texas' Economy, and jeopardize Nation's Security and Energy Independence.
At the end of 2024, Morgan Stanley, Citi Group and Bank of America all left the United Nations’ Net Zero Banking Alliance. Although none of these companies are on Texas’ list, this is just one example of the work our leaders have accomplished. A company that still sits on Comptroller Hegar’s list? BlackRock.
The former poster child of the ESG movement, BlackRock, announced it would be leaving the United Nations’ Net Zero Asset Managers Initiative (NZAMI). NZAMI is an international group of asset managers that are committed to supporting “net-zero greenhouse gas emissions by 2050 or sooner.”
Critics pointed to the potential conflict between these asset managers’ fiduciary duties and their commitment to decreasing both their carbon footprint, and that of the companies they invest in.
In other words, the initiative and their asset manager signatories are incompatible with the oil and gas industry – the backbone of the Lone Star State’s economy.
Critics pointed to the potential conflict between these asset managers’ fiduciary duties and their commitment to decreasing both their carbon footprint, and that of the companies they invest in.
In other words, the initiative and their asset manager signatories are incompatible with the oil and gas industry – the backbone of the Lone Star State’s economy.In a client letter obtained by Reuters announcing their departure, BlackRock said “our memberships in some of these organizations have caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials.” Many of these public officials that have held BlackRock accountable reside right here in Texas, including Comptroller Hegar, Governor Abbott and Lieutenant Governor Patrick.
Prior to those departures from the climate initiatives, BlackRock also announced a series of significant investments into Texas companies, including those in the oil and gas space.
For example, they announced a joint venture with Houston-based Occidental Petroleum to develop a direct air capture facility in West Texas, thereby extending the life of the state’s oil fields, helping to preserve the industry.
This past summer, the BlackRock doubled down on its investment in Texas, joining with Citadel Securities and other backers to help launch the Texas Stock Exchange, which will provide more capital, choice, opportunity and freedom for our businesses, and our state.
This past summer, the BlackRock doubled down on its investment in Texas, joining with Citadel Securities and other backers to help launch the Texas Stock Exchange, which will provide more capital, choice, opportunity and freedom for our businesses, and our state.
All further signs that our elected leaders have made some of the biggest players on Wall Street pay closer attention to what is happening here in Texas!
- READ MORE: New Report Shows the Death of the ESG Movement was Started in Texas
- It is no stretch of the imagination to say these developments are something that Texas’ Republican legislators can take credit for.
Taking to X after BlackRock's NZAMI departure, the Comptroller expressed his intent to follow the “established procedures” and “examine any evidence” provided by the firm to determine if they are a suitable candidate to be removed from the boycott list. Hegar’s tweet was noticed by others who have been leading the fight against ESG in Texas.
The Texas Public Policy Foundation praised the Comptroller for his leadership, writing:
“Outstanding leadership! BlackRock’s exit from the Net-Zero Asset Managers Initiative marks a critical step toward ending harmful climate-driven financial discrimination.”
Similarly, the Republican Party of Texas acknowledged Comptroller Hegar’s critical role, thanking him for his exception leadership.
Regardless of what a Donald Trump presidency holds for Texas, the nation, Wall Street, or other ESG and "environmental" alliances, the leadership of the state's key elected officials, and the laws they enacted, rescued the betterment of the nation’s economy and businesses.
Similarly, the Republican Party of Texas acknowledged Comptroller Hegar’s critical role, thanking him for his exception leadership.
Regardless of what a Donald Trump presidency holds for Texas, the nation, Wall Street, or other ESG and "environmental" alliances, the leadership of the state's key elected officials, and the laws they enacted, rescued the betterment of the nation’s economy and businesses.Previously, some of these companies’ activities and their role in the Environmental, Social & Governance ESG movement threatened our state's industries – as well as those nationwide – but the turn about resulting from the actions of a handful of leaders in Texas has helped others realize the change would not have occurred without the import of the Lone Star State.
Other firms, especially those at the top of ShareAction’s rankings who are still pushing ESG, should take note of Texas’ leadership.
