OKLAHOMA CITY – State Treasurer Todd Russ, the public official who manages the list of financial institutions banned from doing business with state entities because of their policies deemed hostile to the oil and gas industry, praised three banks and investment firms last week after they dropped their membership in Climate Action 100+.
Russ commended JPMorgan Chase, State Street, and BlackRock for their departure from the global investment coalition that has pressured companies to decarbonize.
JPMorgan Chase and State Street quit Climate Action 100+, and Black-Rock, the world’s biggest asset manager, scaled back its ties to the organization by transferring its membership to an international entity.
Climate Action 100+ shifted its focus last summer: from exerting pressure on companies to disclose their net-zero progress, to efforts to compel them to reduce emissions.
State Street claimed the new priorities compromised its “independent approach to proxy voting and portfolio company management.” And BlackRock said the tactics “would raise legal considerations, particularly in the U.S.”
Collectively, the troika accounted for a withdrawal of nearly $14 trillion from an organization bent on marshaling Wall Street’s clout to expand the climate agenda.
Climate Action 100+ “required big investors like BlackRock to act like climate regulators,” Russ wrote in his announcement. The association asked its members to “cause radical changes throughout the economy for the goal of reducing greenhouse gas emissions.”
Those changes included “pressuring utilities to shut down their natural gas and coal plants and putting more pressure on energy companies to produce less oil and natural gas,” he said.
“Such radical consequences would damage Oklahoma’s jobs, economy, tax base, and pensions,” the Treasurer said.
Instead, he continued, firms such as BlackRock “should focus only on financial return, and depart from any other climate groups that require using client money to pursue ESG [environmental, social, and governance] goals.”
BlackRock remains on the state’s banned list, even though it has significant investments in Oklahoma-based Chesapeake Energy, Vital Energy, ONEOK, Oklahoma Gas & Electric, and ONE Gas, parent company of Oklahoma Natural Gas Co.
Jordan Harvey, the treasurer’s chief of staff, told Southwest Ledger recently that Russ is “constantly evaluating” the “actions and behavior” of companies on the state’s blacklist, and is required by law to update the list annually but not more often than quarterly. His next deadline is this May.
Following is the remainder of the Treasurer’s special statement released Feb. 20: “As Oklahoma’s Treasurer, my duties include safeguarding our state’s financial health. State law directs me to make sure our state’s money is not used to subsidize firms boycotting key industries supporting our economy, our government, our pensions and ultimately, our families. Last week, JPMorgan Chase management reached out to me personally concerning the breaking news of their exit from Climate Action 100+.
“After a lengthy and open discussion, they stated no plans to exit the other climate groups and had no conflicting statements to offer them as continuing member in the Glasgow Financial Alliance for Net Zero (“GFANZ”), the Net Zero Managers Initiative, and the Net-Zero Banking Alliance. This is confusing at best. The latest public statements by JPMorgan Chase were impressive and indicate a renewed interest in protecting the oil and gas interests of Oklahomans as well as America. Sadly, when pressed about their continued memberships with the other alliances, J.P. Morgan Chase could not offer any statements that indicate they are proposing different views or goals as remaining members with the other climate activist groups.
“Over the last year I have spoken with each bank or asset manager on our Restricted Financial Company List. In each conversation, I clearly stated the need to withdraw from groups where membership requires actions that violate our state law. These groups include Climate Action 100+, the Glasgow Financial Alliance for Net Zero, the Net Zero Managers Initiative, and the Net-Zero Banking Alliance.
“Membership in a group like the Net Zero Banking Alliance (NZBA) requires banks to pressure their customers to reduce their greenhouse gas emissions until those companies meet rigid and extreme targets for net zero emissions. For example, banks like JPMorgan Chase have made recent statements contrary to the goals and mandates of Climate Action 100+.
“However, they – JPMorgan Chase in addition to the other banks and money managers on the restricted list – agreed to “[t]ransition the operational and attributable greenhouse gas (GHG) emissions from their lending and investment portfolios to align with pathways to net-zero by 2050 or sooner.” JPMorgan Chase and other NZBA members followed this commitment with targets for specific industries. Clearly, the only way to meet these targets is to either de-bank companies unaligned with net zero, or use the threat of redirecting investing to force companies to change. Both of these actions violate our boycott laws.
“Reaching net zero requires companies to make dramatic and unprofitable changes that will cost somewhere between $125 trillion and $275 trillion globally,” according to McKinsey Global Institute.
As a coalition of a dozen Republican state agriculture commissioners recently noted, “reaching net zero in agriculture requires Americans to cut their red meat consumption by 50%, stop using fertilizer, and electrify farm equipment.” According to the International Energy Agency, net zero in electricity generation “means cutting fossil-fuel based generation from 61% to 2%, and reducing total electricity generation while the world population doubles.”
Forcing companies to align with net zero “would devastate not just Oklahoma’s economy and tax base, but becomes a national security issue for the entire country and a world health issue for the entire universe. Financial institutions managing state money have no business asking companies to boycott industries providing Oklahoma and America our jobs, supporting our economy, creating national security and funding state finances, all things to which I am entrusted with protecting,” Russ asserted.
“The prerequisite for change is acknowledging change needs to occur in the first place. ‘Don’t just tell me, show me’ is my new moto. Abandoning Climate Action 100+ shows me the largest financial institutions recognize it is wrong to use their market share to pressure companies to meet ESG goals like net zero greenhouse gas emissions. Leaving the Glasgow Financial Alliance for Net Zero, the Net Zero Asset Managers Initiative and the Net Zero Banking Alliance must be next in their action sequence to tell me they really mean what they say.