Texas Attorney General Ken Paxton sent the Don’t Mess With Texas by issuing an advisory letter providing updates and guidance on the enforcement of laws passed by the Texas Legislature restricting government entities from granting large contracts to companies that boycott energy companies, discriminate against firearm entities or associations, or boycott Israel.
This summer, the 88th Regular Session (2023) of the Texas Legislature reinforced this as they voted to enact Senate Bill 833 (“SB 833”), which aims to prohibit insurers operating in Texas from using environmental, social, or governance (“ESG“) models, scores, factors, or standards to charge different rates to businesses or risks in the same class facing essentially the same hazards.
No Texas governmental entity may enter into a contract with such boycotters or discriminators for the purchase of goods or services with a value of $100,000 or more.
Companies that contract with governmental entities must verify in writing that they do not and will not during the term of the contract boycott energy companies; have a practice, policy, guidance, or directive that discriminates against a firearm entity or firearm trade association; or boycott Israel.
Paxton’s letter advises that it is the responsibility of all governmental entities to exercise due diligence to uphold both the letter and spirit of state law.
This includes exercising their own due diligence and monitoring compliance with relevant government code chapters upon contract formation and any renewal or extension of the contract’s term.
The Public Finance Division of the Office of the Attorney General— which is vested with authority to review and approve the issuance of municipal bonds in Texas—has taken proactive measures to ensure that companies underwriting municipal bonds in this State comply with the law.
“The Office of the Attorney General will continue to vigorously enforce our laws that prevent taxpayer funds from going to companies whose ‘ESG’ policies harm Texans or key Texas industries,” said Attorney General Paxton.
“Companies who discriminate against firearms businesses and organizations, the oil and gas industry, or the nation of Israel will not enjoy the opportunity and privilege of winning public contracts in Texas.”
In 2021, Texas passed the law, which resulted in bans against BlackRock, Credit Suisse, and UBS, along with sustainable investment funds from other banks.
“My greatest concern is the false narrative that has been created by the environmental crusaders in Washington, D.C., and Wall Street that our economy can completely transition away from fossil fuels, when, in fact, they will be part of our everyday life into the foreseeable future,” Texas Comptroller Glenn Hegar said at the time. “A complete divestment of the industry is not only impractical and illogical but runs counter to the economic well-being of Texas and our citizens.”
Other businesses include BNP Paribas, Credit Suisse Group, Danske Bank, Jupiter Fund Management, Nordea Bank, Schroders PLC, Svenska Handelsbanken, and Swedbank. The list of funds is much longer. It includes nearly 350 funds, including Goldman Sachs Bloomberg Clean Energy Equity ETF, Goldman Sachs ActiveBeta Paris-Aligned Climate U.S. Large Cap Equity ETF, and JPMorgan U.S. Sustainable Leaders Fund.
“Texas is leading the fight to curb the expansion of the Environmental, Social and Governance (ESG) movement, a woke investment strategy that places a priority on subjective environmental and social metrics instead of financial metrics that ensure quality returns for investors,” Railroad Commission Chairman Wayne Christian said.
“Texas is where ESG extremists will meet their match,” he continued. “We are sending a clear message to Wall Street: If you boycott Texas oil and gas, we boycott you.”
At stake are trillions in investments — including by state pension funds, individuals’ retirement savings — and the future of the energy industry that Texas relies so much on.
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This might get some of the tin pot dictators on the water boards to think twice before implementing ESG.
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Good for Paxton and Texas, especially the part about not boycotting Israel.
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So proud of Ken Paxton and our legislators for standing up against ESG. It is just another attempt by the far left to control our money while financing their communist marxist policies. I thank god everyday I live in Texas!
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