State Bank Regulations Become New Front in the Fossil Fuel Wars
Stephen Parsley/Justin A. Miller: natlawreview.com/
May 5, 2022
West Virginia recently became the second state to enact financial regulations designed to ward off efforts to deny fossil fuel companies access to banking services – but it looks like it may not be the last. On March 30, 2022, West Virginia Senate Bill 62 became law, requiring that all branches of state government cease doing business with any bank or investment firm engaged in a “boycott” of fossil fuel companies.
Most importantly, the law disqualifies any institution that boycotts fossil fuel companies from managing investments for the state’s retirement funds. Even before the law’s enactment, coal-heavy West Virginia had already pulled some assets from an investment fund managed by BlackRock following reports that BlackRock advocated that companies adopt measures to limit carbon emissions.
Texas – the Model for States Protecting Fossil Fuel Companies
West Virginia’s new law follows in the footsteps of Texas, which last year enacted a bill requiring its comptroller to make a list of all financial companies that boycott energy companies. Any “financial company” – a category that includes any “publicly traded financial services, banking, or investment company” – engaging in such a boycott is subject to divestment from the state’s retirement systems and school funds. These funds total approximately $273 billion in assets. Read more here.