West Virginia has taken a significant step by prohibiting four major financial institutions from participating in state contracts valued in the tens of billions of dollars due to their environmental policies.
State Treasurer Riley Moore has included Citigroup, TD Bank, HSBC, and The Northern Trust Company on the state’s Restricted Financial Institution List, citing their involvement in a boycott of the fossil fuel industry. This action aligns with a 2022 state law aimed at combatting the sustainable investing movement.
“We are absolutely going to stand by our industries here in fossil fuels,” Moore emphasized to FOX Business. He highlighted the continued importance of coal consumption globally and criticized perceptions propagated by climate activists.
The West Virginia State Treasurer’s Office, responsible for managing $22 billion in banking transactions last year, has barred the aforementioned institutions from future bidding opportunities. Moore’s office conducted a thorough review of their environmental, social, and governance (ESG) policies before adding them to the list.
The ESG movement advocates for divesting from traditional energy industries in favor of green energy sectors to address climate change. Moore issued warnings to the four banks in late February, urging them to revise their ESG strategies or demonstrate non-participation in fossil fuel industry boycotts.
Moore praised BMO Bank and Fifth Third Bank for cooperating and adjusting their investment strategies to align with state requirements.
This move represents an escalation in West Virginia’s stance against the ESG movement. Previously, the state’s review targeted banks engaged in current business with the state. However, the scope has expanded to include institutions not currently authorized for state business.
The listed banks join others such as BlackRock, Goldman Sachs, JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co., already on the Restricted Financial Institution List.
West Virginia introduced the Restricted Financial Institution List law in 2022, empowering the State Treasurer’s Office to identify institutions boycotting coal, oil, or natural gas companies without a valid business rationale.
The listed banks have refuted claims of boycotting the fossil fuel industry, asserting their significant investments and support for energy companies. Northern Trust, for instance, highlighted its substantial investment exposure to traditional energy sectors and its services catering to fossil fuel management.
While HSBC emphasized its commitment to working with energy companies and supporting a transition to new job creation, Citigroup and TD Bank have yet to respond to requests for comment.