Treasurer sends letters to six big investment companies, charging they boycott fossil fuels

The state Treasurer’s Office has sent letters to six of America’s largest investment companies, warning that they may be ineligible for some West Virginia contracts over their environmental policies.

The letters were sent to BlackRock Inc., Goldman Sachs, JPMorgan Chase, Morgan Stanley, U.S. Bancorp and Wells Fargo. MetroNews and other news organizations got the letters through public records requests.

The warnings came about after this year’s passage of Senate Bill 262, directing the Treasurer 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.

“Earlier this year our office proposed, and the Legislature passed, Senate Bill 262 to push back against unfair discrimination against our coal, oil and natural gas industries by the financial sector as part of the so-called ‘environmental, social and governance’ or ‘ESG’ investing movement,” Moore stated earlier this week. “We’ve now demonstrated 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 Institution List will be removed from said list if the financial institution ceases to engage in activities that boycott energy companies and provides information to the WVSTO, in writing, demonstrating that it has ceased all such activity.”

The letters addressed to each company don’t cite any specific examples of company statements or policies that have led to their inclusion.

The new law defines a “boycott” as refusal to deal with a company without “a reasonable business purpose” — particularly when the company seeking financing does business in fossil fuels markets or does business with other companies involved with fossil fuels.

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

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

The potential restrictions would apply to banking contracts for the state. The Treasurer’s Offices manages roughly $18 billion in state government receipts on an annual basis.

Riley Moore

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

“So for me, I had to do something to start to push against this. We felt like we had a clear conflict of interest for financial institutions to handle our dollars that 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 corporate leaders that the company has a fiduciary responsibility to engage with companies about the shifting tide of climate. But the letter explicitly stated that BlackRock itself is not divesting from carbon producers.

“Divesting from entire sectors – or simply passing carbon-intensive assets from public markets to private markets – will not get the world to net zero. And BlackRock does not pursue divestment from oil and gas companies as a policy,” Fink wrote in the letter. “We do have some clients who choose to divest their assets while other clients reject that 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 the companies leading the transition present a vital investment opportunity for our clients and driving capital towards these phoenixes will be essential to achieving a net zero world.”

BlackRock has maintained it has a fiduciary responsibility to protect clients’ money and protect clients’ investments by openly discussing the financial effects of climate change. In other words, BlackRock is describing investment priorities as a reasonable business purpose.

“We focus on sustainability not because we’re environmentalists, but because we are capitalists and fiduciaries to our clients. That requires understanding how companies are adjusting their businesses for the massive changes the economy is undergoing. As part of that focus, we are asking companies to set short-, medium-, and long-term targets for greenhouse gas reductions,” Fink wrote.

Moore has been an outspoken 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 along with Vivek Ramaswamy, the author of “Woke Inc: Inside Corporate America’s Social Justice Scam.”

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

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

The article described Moore’s actions as “steps to cut ties with large asset managers that fail to advance the interests of his state’s citizens. This is a type of market response: State treasurers aren’t market regulators, but they are market participants who allocate capital on behalf of their constituents. Moving money has a greater impact than reclaiming voting power.”





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