Texas Attorney General Ken Paxton said on Friday that Barclays bank will no longer be permitted to underwrite municipal bonds after failing to comply with the state’s ESG standards.
The Attorney Generals office said in the release that Barclays “was identified as having a standing letter with the OAG while also being a Net Zero Alliance member of affiliate”, leading to concerns that “Barclays’ activities may require it be classified as a ‘fossil fuel boycotter’ under Texas law.”
When asked for more information in a letter to the All Bond Counsel on November 1, 2023 regarding their ESG commitments, Barclays decided not to comment.
Barclays recognized that its failure to disclose its ESG involvement may prevent it from entering into contracts to provide in-scope services to Texas governmental entities until they submit a response.
“Until further notice, we will not approve any public security issued on or after today’s date in which Barclays purchases or underwrites the public security or is otherwise a party to a covered contract relating to the public security” the press release reads.
“Until further notice, we will not approve any public security issued on or after today’s date in which Barclays purchases or underwrites the public security or is otherwise a party to a covered contract relating to the public security” the press release reads.
Texas has been fighting hard against ESG. In 2021 a bill was passed that seeks to ban companies that boycott certain energy companies. In 2022 it was announced that BlackRock, Credit Suisse and UBS made the list of 10 companies that will be barred from doing business with the state due to their policy to “boycott energy companies”.
“The environmental, social and corporate governance (ESG) movement has produced an opaque and perverse system in which some financial companies no longer make decisions in the best interest of their shareholders or their clients, but instead use their financial clout to push a social and political agenda shrouded in secrecy,” Texas Comptroller Glenn Hegar said in the statement announcing the ban list.
“Our review focused on the boycott of energy companies, rather than a review of the entire ESG movement. This research uncovered a systemic lack of transparency that should concern every American regardless of political persuasion, especially the use of doublespeak by some financial institutions as they engage in anti-oil and gas rhetoric publicly yet present a much different story behind closed doors. This list represents our initial effort to shine a light on entities that are engaging in these practices and create some clarity for Texans whose tax dollars may be working to directly undermine our state’s economic health” the statement continued.