This article originally appeared in The Texas Tribune: Read More
A bill filed in the Texas Senate Thursday would direct the state’s massive investment funds to divest from any companies that “boycott” fossil fuels.
Pressure is increasing on Wall Street for companies and investment funds to reduce their financial support for oil and gas companies. Environmental activists have long called for Wall Street and university endowments to stop investing in fossil fuels, and several universities have complied.
Last year, Larry Fink, founder and chief executive of BlackRock, one of the world’s largest investment companies, wrote to shareholders that the firm would make climate change “a defining factor” in its investment strategy, and in January, he further said it would exit investments that present a “sustainability-related” risk.
The Texas bill bites back: If passed, the legislation filed by state Sen. Brian Birdwell, R-Granbury, along with four other Republican state senators, would require state entities — including state pension funds and Texas’ massive K-12 school endowment — to divest from companies that refuse to invest in or do business with fossil fuel-based energy.
Texas state funds identified in the bill include the $46 billion Texas Permanent School Fund, the largest such K-12 fund in the U.S; the Teacher Retirement System of Texas, which manages nearly $165 billion in investments; and the Employees Retirement System of Texas and Texas Municipal Retirement System of Texas, which each manage $31 billion.
Senate Bill 13 — low numbered bills signal a high priority for lawmakers — would also prevent companies, retired beneficiaries and others from suing the state over the divestments. In February, before the winter storm that left millions of people across Texas without power and killed dozens, Lt. Gov. Dan Patrick said legislation to prohibit the state from doing business with firms that “boycott” oil and gas companies was a priority and will “pass easily,” according to the Austin American-Statesman.
The early version of the bill directs the state comptroller to create a list of companies and funds that “boycott” fossil fuel companies and allows the attorney general to take enforcement action against state funds that do not divest from the companies on the list.
If the state fund determines that divesting would cause it to lose value or deviate from its benchmark, it could provide that information in a written report to the comptroller, the Legislature, and the Texas attorney general to request an exemption.