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Texas has added NatWest Group to its list of companies reportedly boycotting the fossil fuel industry.
In a updated listBritish auditor Glenn Hegar added the British bank to his list on Wednesday. the bank’s policy that would limit its reserve-based lending specifically to financing oil and gas exploration, extraction and production for new customers after the end of 2025, according to an emailed response that Bloomberg And Reuters.
NatWest’s Policy states“…we will not renew, refinance or extend existing reserve-based loans specifically used to finance oil and gas exploration, extraction and production.”
NatWest declined to comment to Reuters and the Audit Office did not immediately respond to a question about the impact of the bank’s inclusion on the list.
Since it First published: August 2022Sixteen financial institutions were on the list of those boycotting energy companies.
Hegar released the list, which included BlackRock, BNP Paribas, Credit Suisse, UBS and six other financial firms, for the same reasons that the newest entrant, NatWest, was included on the list. HSBC, SocGen and Crédit Agricole were added to the list last year.
The divestment list was created under a 2021 law in Texas that requires the Lone Star State – the nation’s top oil and natural gas producer – to cease doing business with companies that “restrict trade relationships” with fossil fuel companies. Under the law, when a company secures a spot on the divestment list, state pension funds and other government organizations have 30 days to report their direct and indirect holdings in the company. The publicly traded company, meanwhile, has 90 days to explain its stance on fossil fuels.
The law has prompted municipal bond issuers in Texas to avoid companies targeted by the comptroller.
Asset manager BlackRock is the only U.S. company on the list, which the Texas Comptroller’s Office updates quarterly.
Several states have taken action against financial institutions they see as boycotting the fossil fuel industry. In January, Kentucky introduced a divestment list that includes major companies such as JPMorgan Chase, Citi and BlackRock, as well as eight other financial firms – a similar move to Texas. In July 2022 West Virginia announced that it would stop awarding new government contracts to BlackRock, JPMorgan, Wells Fargo, Goldman Sachs and Morgan Stanley, citing those companies’ decisions to reduce their financing of coal companies.
In a separate attempt to examine the fossil fuel policies of several banks, Attorney General of Texas has launched an investigation to bar them from financing municipal bonds. JPMorgan Chase, Bank of America, Wells Fargo and seven other financial institutions have been scrutinized to determine whether they are violating state law through their membership in the Net-Zero Alliance, a United Nations initiative that aims to “finance ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050.”
In January, Ken Paxton, Attorney General of Texas, banned The UK-based bank Barclays barred from participating in the state’s municipal bond market due to its affiliation with the Net-Zero Alliance program. However, Barclays – the ninth-largest underwriter of municipal bonds in Texas in 2023 – refused to provide additional information to prove its compliance with the state law.
