West Virginia’s Treasurer wants to keep a list of financial institutions that steer clear of investments in fossil fuel companies, possibly resulting in decisions to withhold state deposits from those bankers.
Treasurer Riley Moore spoke in favor of Senate Bill 262 before the Energy, Industry and Mining Committee.
“Don ‘t you think that would be a slippery slope when you’re beginning to sort of choose winners and losers in this process?” asked Senator Owens Brown, D-Ohio.
Moore replied, “I think they’re already picking us a loser, is what I would say. These financial industries have already picked our financial industries losers.”
The chief executive of the major investment firm BlackRock this week defended strategies with a focus on climate. BlackRock’s position has been to engage with companies on carbon transition, rather than divesting from those companies.
“Capitalism has the power to shape society and act as a powerful catalyst for change. But businesses can’t do this alone, and they cannot be the climate police,” BlackRock chief Larry Fink wrote in an annual letter to corporate leaders.
That prompted Moore, earlier this week, to announce that the Board of Treasury Investments would not use BlackRock for its banking transactions. The board manages $8 billion in funds.
“As the state’s chief financial officer and chairman of the Board of Treasury Investments, I have a duty to ensure that taxpayer dollars are managed in a responsible, financially sound fashion which reflects the best interests of our state and country, and I believe doing business with BlackRock runs contrary to that duty,” Moore stated in a news relase.
The bill under consideration by the Legislature is a little more procedural, authorizing the Treasurer to compile a list of companies with policies against investments in fossil fuel industries like coal or gas.
Then, the Treasurer could use the list to disqualify companies for banking contracts. Moore noted this would not apply to investments or pension funds, but would apply instead to more routine deposits of state funds.
“Isn’t this government interference into the private sector, what you’re doing?” asked Brown in the Senate committee meeting.
“I’m a market participant. What I’m doing is stating my preferences in the marketplace,” Moore said.
The bill uses the term “boycott” to describe the actions of some investment companies. Senator Eric Nelson, who also serves on the board for WesBanco, asked what kinds of decisions would be made for financial institutions that decide against investments in fossil fuel companies for straightforward economic reasons.
In an exchange with Nelson, Moore described 30 institutions where West Virginia has deposits and said about two could be affected by the investments bill.
Of the others, Nelson asked, “If one of those institutions happened to unfortunately come out against our main energy sector here, what kind of process would that be and how costly could that be to the state?”
Moore said when state officials go through the process of contracting with bankers, bids would be reviewed and scored by a standing committee, which verifies mandatory requirements.
Nelson followed up by asking, “Would you agree that such a policy that we’re contemplating here has the potential to raise the cost to the State of West Virginia as well as maybe reduce the returns that we would have on your managed cash?”
“No,” Moore responded, “I don’t really think so. In terms of additional cost we wouldn’t cut off a financial institution until we had another financial institution obviously.”
Senator Mike Romano, D-Harrison, had a similar line of questioning, wondering about companies that decide against fossil fuel investments for straightforward reasons.
“So if there’s no policy statement from a financial institution but they’re just not making loans to our extractive industries, who makes the decision whether that’s an unspoken policy or just the proper assessment of creditors?” Romano asked.
“Well, all we can go off of is what is the spoken policy because I don’t want to deal in a gray area in this,” Moore replied. “If they do have an unspoken policy that’s what’s not touched on in this legislation; it’s what’s been stated publicly as a policy framework by that financial institution.”
Senator Rupie Phillips, R-Logan and an outspoken coal supporter, asked if the bill would protect the mining industry.
“I think it absolutely does,” Moore responded. “We’re trying to stand up for our industries, our critical industries in the state of West Virginia — which are obviously critical to our tax collections as it relates to severance tax. We want to do business with the folks that want to do business with us, with our people.”