March 20, 2023

Texas Comptroller Glenn Hegar Announces Update to List of Financial Companies that Boycott Energy Companies

(AUSTIN) — Texas Comptroller Glenn Hegar announced today he has added a firm to his office's list of companies that boycott the oil and gas industry. HSBC Holdings Plc was added to the list following recent updates to the firm’s energy policy. Listed companies are subject to the divestment provisions outlined in Texas Government Code Chapter 809, which define a financial company as a publicly traded financial services, banking or investment company. 

“This is significant given HSBC’s status as Europe’s largest bank, but it should not be surprising,” Hegar said. “HSBC’s new energy policy is a prime example of a broader movement in the financial sector to push a social agenda and prioritize political goals over the economic health of their clients. HSBC’s policy clearly makes the firm a suitable candidate for listing under Texas law.”

The policy states “HSBC will not provide new finance or new advisory services to any client for the specific purposes of projects pertaining to new O&G fields where the final investment decision was taken after 31 Dec 2021 or infrastructure whose primary use is in conjunction with new O&G fields.”

Additionally, the policy forces clients to provide HSBC with their plans to boycott oil and gas. The policy states, “HSBC will engage with clients and will expect them to formulate and provide transition plans that are consistent with HSBC’s targets and commitments …”

“Recent events in the global financial sector provide a stark warning about what can happen when firms lose sight of their fiduciary responsibilities,” Hegar added. “From ratings firms to regulators, significant segments of the sector have lost focus on fundamentals in the rush to prioritize the environmental, social and corporate governance (ESG) movement and force an intellectually dishonest narrative about the so-called energy transition. The result of this blind push to elevate ESG above all else is greater risk to the health of our global economy, and it is not just confined to those firms that choose to pursue this ill-defined and opaque investment trend.

“HSBC’s policies threaten Texas jobs, our state economy and our national security, and the tax dollars of hard-working Texans should not be leveraged to force policies that undermine Texas’ fiscal health and stability,” Hegar said. “I will continue my work to protect the Texas economy, ensure the state has a diverse energy portfolio to meet the needs of our rapidly growing state and fight for Texas taxpayers and retirees who expect their hard-earned money to be invested in a manner that prioritizes returns over progressive social and political agendas.”

The list was initially provided in August 2022. This update also includes enhanced answers to frequently asked questions regarding the entire listing process and the research conducted by Comptroller's office staff. There are no changes to the list of nearly 350 investment funds that are subject to the same provisions as the companies.

State governmental entities subject to the investment prohibitions and divestment requirements in the statute include the following: Employees Retirement System of Texas, Teacher Retirement System of Texas, Texas Municipal Retirement System, Texas County and District Retirement System, Texas Emergency Services Retirement System and the Permanent School Fund.

On the 30th day after receiving the updated list, state governmental entities must notify the Comptroller of the listed financial companies in which the entity owns direct or indirect holdings. And not later than Jan. 5 of each year, such entities are required to submit a report to the presiding officer of each house of the Legislature and the attorney general that identifies all securities sold, redeemed, divested or withdrawn in compliance with the Texas Government Code.

The Comptroller’s office continues to review information on an ongoing basis, and the list may be subject to change as often as quarterly. The Comptroller encourages state governmental entities to review the listing criteria to determine whether prospective investments could be subject to listing later, as well as any current business dealings with listed entities in Annex I.