Finance Firms on Wall Street Says an Emphatic “No” for Boycott of Energy Industry

    Wall Street firms are rolling out their support for fossil fuels to convince officials who are hunting for firms opposed to energy industries to allow them to do business with the state.

    Exploring more on the issue

    As per Bloomberg News, twenty companies, including HSBC and JPMorgan Chase & Co, have responded to State Controller Glenn Hegar’s request over the last two months to disclose if they have prohibited or restricted energy companies from doing business with them. They replied with a clear no, and one small Dallas-based firm responded with “Hell no.

    Hegar has to finalize a list by September of those companies who seem to boycott the energy industry. A new bill was enacted in 2021 where it prevents the governments from entering into contracts with firms that have limited ties with gas and oil companies.

    The response by Wall Street offers a glimpse of how they are navigating the political environment after Texas’s thrust on financial services firms. Banks and asset managers face the headache of similar laws being passed after Republican lawmakers have taken up the Texas bill. 

    JPMorgan said that it had credit exposure oil and gas sector totaling $42.6 billion as of Dec. 2021. In a letter to the comptroller, the bank said that it recognized the need to balance greenhouse emissions with policies that support and ensure energy resources are available.   

    As per Stacy Friedman, JP Morgan Executive Vice President and general counsel, the bank provide financial products and services to companies engaged in the exploration, production or manufacturing, transportation, sale, and utilization of fossil fuel-based energy. 

    Many of the financing decisions JP Morgan makes are based on normal business practices. However, they do not lend to companies in mountain tops coal mining. 

    CEO John Alban of Dallas Based Cushing Asset Management wrote “Hell no” in response to Bloomberg’s request. He said that the company has been investing in traditional gas and oil firms for a long and has expanded to renewable energy sources. 

    In a letter dated May 16, HSBC committed to aligning its portfolio of greenhouse emission customers to net-zero by 2050 or earlier. It has provided financial services to energy customers located in Texas, and it engages itself with the energy sector. The letter said that HSBC does not believe in boycotting financing energy companies

    U.K.-based investment company abrdn Plc noted that its commitment to a net-zero asset manager initiative is to work with clients and achieve net-zero emission by 2050. 

    Spokespersons for HSBC, JPMorgan, and abrdn did not comment further.

    Out of the 22 companies that replied to the comptroller, McVeigh Capital Management and Rathbones Group Plc, and Reynders did not specify whether they boycotted energy companies. Rathbones clarified its decisions not to invest in certain energy businesses as the company thought it was in the best long-term interest of its clients and society. 



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