Oklahoma State Treasurer Todd Russ (R) on May 3 issued a list of 13 financial institutions that are ineligible to do business with the state under a 2022 law because, according to Russ’s office, they engage in energy boycotts that, in its opinion, hurt the state’s economy. The listed institutions cannot manage state pension funds or enter into certain other contracts with public entities. According to Fox Business:
“Oklahoma State Treasurer Todd Russ is planning to announce the sweeping measure Wednesday morning which represents one of the most aggressive actions any state has taken against banks pursuing so called environmental, social and governance (ESG) initiatives. The move ultimately blocks the banks from managing billions of dollars in Oklahoma pensions, investments and other state entities.
“‘The energy sector is crucial to Oklahoma’s economy, providing jobs for our residents and helping drive economic growth,’ Russ said in a statement. ‘It is essential for us to work with financial institutions that are focused on free-market principles and not beholden to social goals that override their fiduciary duties.’
“The ban impacts some of the largest asset managers and banks in the country including BlackRock, Wells Fargo, JPMorgan Chase, Bank of America and State Street. BlackRock alone reported in April that it has a staggering $9.1 trillion in assets under management.
“Oklahoma’s actions come three months after Russ sent a letter and questionnaire to dozens of banks and financial institutions on Feb. 1, asking about their climate and energy investment policies. Russ noted at the time that BlackRock manages more than 60% of the Oklahoma Public Employees Retirement System.
“Under a 2022 law passed by the state’s legislature last year, the state’s treasurer is mandated to probe the investment policies of banks it does business with and assemble a list of companies determined to be engaged in a boycott of the energy sector. Russ’ office said it received almost 160 responses which helped inform the decision Wednesday….
“Overall, as of 2022, Oklahoma’s oil and gas industry and its component sectors sustained 4,000 businesses, produced $19 billion in state gross domestic product, provided state households with $16.5 billion in earnings and created 85,050 jobs, according to state data. The state is the nation’s sixth-largest crude oil producer and fifth-largest producer of marketed natural gas.
“ESG standards pursued by major financial institutions, though, prioritize environmental investments, boosting green energy projects once deemed risky, over traditional oil and gas investments as well as corporate social priorities such as boardroom diversity initiatives.”
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