On May 3, Oklahoma State Treasurer Todd Russ banned 13 major financial institutions from doing business with the state, following a review that concluded the banks engaged in energy boycotts.
Central to the issue is the financial institution’s adherence to so-called environmental, social and governance (ESG) initiatives.
Included in the list of banks banned are asset manager giants Blackrock and JP Morgan Chase, as well as Bank of America, Wells Fargo, and State Street.
The move will block the banks from managing billions of dollars worth of assets including Oklahoma’s pensions, investments and other state entities.
In April, Blackrock reported that it had a massive $9.1 trillion in assets under management. As of February 2023, Blackrock managed more than 60 percent of the Oklahoma Public Employees Retirement System.
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In a statement on the matter Russ said, “The energy sector is crucial to Oklahoma’s economy, providing jobs for our residents and helping drive economic growth. It is essential for us to work with financial institutions that are focused on free-market principles and not beholden to social goals that override their fiduciary duties.”
In early February this year, Russ sent a letter and questionnaire to dozens of banks operating in the state asking about their climate and energy investment policies, fulfilling the state’s obligations under a 2022 law passed by the state’s legislature, which mandated a probe into the investment policies banks have implemented.
The State Treasurer’s office received 160 responses, which Russ used to inform the decision.
“We appreciate the prompt response from these financial institutions,” Russ said, according to Fox Business, adding that “our state’s financial partnerships should reflect our priorities and values, and it is our responsibility to partner with companies that share our vision for a strong and prosperous Oklahoma economy, and that includes our energy sector.”
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The energy sector is a major source of financial security for the state. In 2022 alone, Oklahoma’s oil and gas industry sustained an estimated 4,000 businesses, produced $19 billion in state gross domestic product, created over 85,000 jobs and provided Oklahoma residents with $16.5 billion in earnings, Fox Business reported.
However, ESG standards pursued by these major financial institutions prioritize environmental investments and risky green energy projects over oil and gas investments and also prioritize boardroom diversity initiatives and corporate social initiatives.
Critics of ESG say that the scheme allows banks to sidestep their legally-mandated fiduciary duties to prioritize profits for their clients.
Derek Kreifels, the CEO of the State Financial Officers Foundation, told FOX Business on Wednesday, “This is a significant step by Treasurer Russ in guarding his state’s financial security against ESG advocates like BlackRock and State Street and other financial institutions that boycott energy companies and prioritize agendas that run contrary to Oklahoma taxpayers’ interests,” adding that “Treasurer Russ and state financial officers across the country are at the forefront of the fight against ESG, ensuring that American families’ savings are invested according to their values and not ESG extremists.”
