In the US, Republican politicians are getting serious about the backlash against sustainable finance. UBS and other big firms are now on a blacklist.
Oil-rich Texas has UBS in its sights. As the agency «Bloomberg» (behind paywall) reports, the Swiss bank, along with the world's largest asset manager Blackrock and eight other financial firms, is on a list that could make it much more difficult for them to do business in the state.
Boycott Accusation
The list was drawn up by Texas state comptroller Glenn Hegar, a Republican, who concluded that the companies named would their investment policies amount to a «boycott» of the state's energy industry.
This comes after Hegar sent inquiries to over 150 companies last spring requesting information on whether they were shunning the oil and gas industry in light of sustainable investment and financing goals and in line with the exclusion strategy of climate offenders prevalent in sustainable finance.
Exclusion by Law
In Texas, a state law backed by the Republican Party has been in effect since September 1 of last year that prohibits state agencies from contracting with companies that have curtailed their relationships with energy companies emitting CO2.
UBS pledged in March to reduce the carbon footprint of its loan book in the fossil fuel, power generation, and real estate sectors as it moves toward a net-zero goal in 2050. These continue to figure prominently in the institution's loan portfolio, accounting for about 43 percent of the total.
Florida Forging Ahead
The Republican efforts against sustainable finance are underway in the US with an eye toward the midterm elections. This follows recent successes of opposing Democrats with a stimulus program for the sustainable transformation of the economy. Earlier this week in Florida, Republican Governor Ron DeSantis decreed the state pension fund would no longer invest according to ESG criteria.
Affected financial firms have so far not given in to these pressure attempts, stressing that they were acting on behalf of a global clientele.
Ironically the motto «Don't mess with Texas» was the brainchild of the state's department of transportation to combat a littering problem. It seems that is now being extended to the sustainable investing sector, but in a very different context.
