CHARLESTON — On the heels of the state’s top banker taking action against an investment group deriving funding from fossil fuel industries, a legislative committee has taken further action against banks and corporations. investment.
The West Virginia Senate Energy, Industry and Mines Committee recommended Senate Bill 262 in a voice vote on Tuesday afternoon, then sending the bill to the Senate committee. finances.
The bill, sponsored by Sen. Rupie Phillips, R-Logan, and supported by State Treasurer Riley Moore, would authorize the State Treasurer to restrict state banking contracts with any bank or group of investment that refuses to deal with coal or natural gas companies or terminates contracts with existing fossil fuel companies as a means of punishing companies that engage in extractive industries.
SB 262 would require the state treasurer to create and maintain a list of restricted financial institutions annually or as often as practicable. The list must be made public with a written notice to financial institutions informing them that they are on the shortlist.
Any bank, banking association, investment house, savings and loan, credit union or savings bank on the list of restricted financial institutions would not be able to enter into new banking contracts with the state or retain current contracts. Financial institutions that can prove that they are not or no longer participating in the boycott of energy companies would be removed from the list.
Speaking to the committee on Tuesday, Moore said the bill only targeted state banking contracts with private financial institutions. Moore already has the power to withdraw from banking contracts with 30 days’ notice.
“There are banks out there that won’t lend to them anymore or make it harder for coal and gas in the state of West Virginia to continue operations,” said Moore. “What this list does is provide transparency on how my activities, if we are going to ask financial institutions to certify that they are not boycotting the fossil fuel industry, if they are not in able to meet this certification, then they would not be eligible for a banking contract in West Virginia.
The bill includes an exemption for normal business purposes, such as final lending decisions to fossil fuel companies. But that would prohibit financial institutions from declaring up front that they won’t lend to fossil fuel companies.
State Sen. Owens Brown, D-Ohio, raised some concerns about the bill.
“Don’t you think it would be a slippery slope when you start picking winners and losers in this process?” Brown asked.
“These financial institutions have already picked our industries as losers,” said Moore. “This is particularly unique, since these banks are handling our taxpayers’ money. Specifically, they are handling severance tax money from the industries they are boycotting. There is a clear conflict of interest there.”
Texas passed a similar bill earlier this year, and Moore said Indiana is set to introduce an anti-boycott bill soon. West Virginia has $7.2 billion under management among 30 depositors. Moore told committee members that if the bill were to pass, it could affect two of those filers.
Moore announced on Monday that he was already taking action against a financial institution in part because of his statements on environmental issues. According to a news release, the Treasurer’s Office informed BlackRock Inc., an investment management company, that the state would no longer do business with the company.
Moore cited reports that BlackRock was urging companies it had invested in to commit to “net zero” energy policies, reducing their greenhouse gas footprint and relying more on green energy sources.
In his annual letter to corporate CEOs published on Monday, BlackRock Chairman and CEO Larry Fink said his net zero philosophy was due to capitalism, not environmentalism. While many companies are actively trying to reduce their climate footprint, Fink said his company’s investment strategy reflects the reality of the moment and the market.
“Most stakeholders, from shareholders and employees to customers, communities and regulators, now expect companies to play a role in decarbonizing the global economy,” Fink wrote. “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.
In November, Moore and 15 other states wrote an open letter to the U.S. banking industry warning them against withdrawing investment from fossil fuel industries or making investment decisions based on political considerations, calling it “woke up capitalism”. According to the letter, Moore and the coalition said they would take collective action against banks that boycott investments in coal, oil, natural gas and other fossil fuels.
Last May, Moore and 14 state finance officials sent a letter to John Kerry, President Joe Biden’s special presidential envoy for the climate, expressing their concerns about the pressure exerted by the White House on the banking and financial institutions to stop lending to the fossil fuel industry. Moore accused Kerry of pushing for a divestment that will force banks to discriminate against coal, oil and natural gas companies.
(Adams can be contacted at [email protected])