Texas blacklists HSBC over ‘boycott’ of fossil fuels

Texas Comptroller Glenn Hegar has added banking giant HSBC to his list of firms boycotting energy companies and subject to state fund divestment. The bank’s recently updated policy of not financing oil and natural gas has led to its inclusion on the list of 11 global financial firms, including BlackRock. The Texas law prohibits investment and requires divestment for state funds entrusted to Hegar’s list of companies. The state is the primary producer of oil and natural gas in the US.

HSBC announced in December of 2020 that it would no longer finance new oil and gas ventures because of climate change. Similarly, many of HSBC’s peers and even some fund managers have adopted similar policies of limiting or phasing out investments in fossil fuel ventures, while prioritizing renewable energy sources.

Republican-run states are against such practices, indicating that they are a boycott of traditional energy sources, and have sought to punish banks and fund managers who implement politically motivated measures regarding climate change. On the other hand, some of the firms targeted by these “red states,” including BlackRock, continue to finance new oil and gas ventures and have challenged Republicans’ descriptions of their policies.

HSBC pursues such policies to limit new fossil fuel financing to restrain greenhouse gas emissions and prevent global warming.