Texas has added NatWest Group to its list of companies that reportedly boycott the fossil fuels industry.
In an updated list, the state’s Comptroller Glenn Hegar added the British bank to its list Wednesday over the bank’s policy that would limit its reserve based lending specifically for financing oil and gas exploration, extraction and production for new customers after the end of 2025, a spokesperson for Hegar’s office told Bloomberg and Reuters.
NatWest’s policy states, "we will not renew, refinance or extend existing reserve based lending used specifically for the purpose of financing oil and gas exploration, extraction and production.”
NatWest declined to comment to Reuters and the comptroller’s office did not immediately respond to a question on the impact of the bank’s placement on the list.
Since it was first published in August 2022, sixteen financial institutions have been placed on the list of those boycotting energy companies.
Hegar first published the list that included BlackRock, BNP Paribas, Credit Suisse, UBS, and six other financial firms on the same grounds that put the newest entrant, NatWest, on the list. HSBC, SocGen and Crédit Agricole were added to the list last year.
The divestment list was created due to a 2021 Texas law requiring the Lone Star state — the nation’s leading oil and natural gas producer — to stop business interactions with companies that “limit commercial relations” with fossil fuel companies. Under the law, when a company secures a place on the divestment list, the state pension funds and other government organizations have 30 days to report their direct and indirect holdings with the company. Meanwhile, the listed company has 90 days to show its stance on fossil fuels.
The law has prompted municipal bond issuers in Texas to avoid firms that have been under the comptroller’s radar.
Asset manager BlackRock is the only U.S. company on the list, which the Texas Comptroller’s office updates quarterly.
Several states have taken action against financial institutions they think are boycotting fossil fuel industries. In January, Kentucky implemented a divestment list that includes major firms like JPMorgan Chase, Citi and BlackRock, along with eight other financial entities — a move similar to Texas. In July 2022, West Virginia announced it would cease giving new state business to BlackRock, JPMorgan, Wells Fargo, Goldman Sachs and Morgan Stanley, citing these companies' decisions to reduce their financing of coal companies.
However, in a separate effort to investigate several banks’ fossil-fuel policies, the Texas attorney general has launched an investigation to exclude them from financing municipal bonds. JPMorgan Chase, Bank of America, Wells Fargo, and seven other financial institutions have been reviewed over whether they are violating state law through their membership in the Net-Zero Alliance — a United Nations initiative that aims to finance “ambitious climate action to transition the real economy to net-zero greenhouse gas emissions by 2050.”
In January, Ken Paxton, Texas AG, prohibited U.K.-based bank Barclays from participating in the state’s municipal bond market over its affiliation with the Net-Zero Alliance program. However, Barclays – the ninth largest underwriter of Texas muni bonds in 2023 – refused to provide additional information to prove its compliance with the state’s law.
