Red States Fighting ‘Woke’ Banks That Push Anti-Fossil Fuel Policies

A sign outside the headquarters of JP Morgan Chase & Co. in New York City, on Sept. 19, 2013. Mike Segar/Reuters

Republican states are fighting efforts by certain banks to push environmental, social, and governance (ESG) standards that promote, among other progressive agenda, anti-fossil fuel policies.

Over the past year, at least 15 Republican-led states have proposed policies or laws that would punish banks for taking an anti-fossil fuel stance. State financial officers from Texas, Arkansas, Utah, Florida, Kentucky, North Dakota, Arizona, Idaho, Louisiana, and South Carolina are taking or considering taking actions against banks boycotting energy firms, according to FOX Business. Texas, Kentucky, and Oklahoma are already compiling lists of banks with such policies.

A spokesperson for Kentucky State Treasurer Allison Ball, when speaking to Fox Business, pointed out that fossil fuel industries are “economically integral” to the state.

“They provide jobs for Kentuckians, fuel communities and the supply chain, and keep the lights on. We want to support these signature industries,” the spokesperson said. “We hope we have sent the message that if you won’t do business with Kentucky, we won’t do business with you.”

West Virginia recently announced that it will block five financial institutions from entering into banking contracts with state agencies after these entities pushed policies against the fossil fuel industry. The sanctioned institutions include JP Morgan, Goldman Sachs, and BlackRock.

Coal, natural gas, and oil industries are critical to West Virginia. In fiscal 2022, for example, the state collected nearly $800 million through taxes from these industries, far more than the $300 collected during the previous fiscal.

“We felt like we had a clear conflict of interest,” West Virginia Treasurer Riley Moore said during a June 8 press conference. “We produce coal, gas, and oil, and this ESG movement in its current form is really an existential threat to our jobs, our economy, and our tax revenue.”

Countering ESG

According to Utah State Treasurer Marlo Oaks, investment managers and banks that act against fossil fuel firms are implementing economic sanctions.

“We need more capital going into oil and gas production, and there are great opportunities there to make money. Why isn’t the money going there? Why aren’t capital markets working, like they have in the past? It’s because of ESG,” he said.

The new policies being adopted by Republican states against entities that act against fossil fuel interests will negatively affect the cash flows of such businesses. For instance, in 2021, Texas passed a law banning doing business with firms that “boycott” energy companies.

As a result, Texas has sidelined JP Morgan, Bank of America, and Goldman Sachs from the municipal bond market this year. JP Morgan had underwritten $3.2 billion worth of Texas municipal bonds in 2021. So far this year, the bank has only underwritten $210 million.