West Virginia State Treasurer Riley Moore has banned four major financial institutions, Citigroup, TD Bank, HSBC, and The Northern Trust Company, from entering into state contracts worth tens of billions of dollars due to their environmental policies. This action was taken in response to a state law passed in 2022 to combat the sustainable investing movement. Moore emphasized the importance of supporting the fossil fuel industry, stating that the consumption of coal is not decreasing and that West Virginia will continue to prioritize its industries in this sector.
The Investment and Banking Services Division of the West Virginia State Treasurer’s Office manages $22 billion in banking transactions annually. The four newly banned institutions, along with previously listed banks, will no longer be able to bid on these transactions. Moore reviewed the banks’ environmental, social, and governance policies before adding them to the Restricted Financial Institution List. The ESG movement advocates for divesting from traditional energy industries and investing in green energy industries to address global warming.
Moore issued notices to the banned banks in late February, warning them that they would be listed unless they changed their ESG strategies or demonstrated that they were not boycotting the fossil fuel industry. BMO Bank and Fifth Third Bank were also warned initially, but have since shown that they do not boycott traditional energy companies. Moore commended these banks for working cooperatively to support fair treatment of the state’s critical industries.
The announcement represents a new phase in West Virginia’s opposition to the ESG movement, as Moore expanded the review of the banking sector to include institutions not currently authorized to do business with the state. The four newly listed banks join BlackRock, Goldman Sachs, JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. on the Restricted Financial Institution List. Moore proposed the Restricted Financial Institution List law, which was enacted in West Virginia in July 2022.
The banks listed by Moore have pushed back, arguing that they do not boycott the fossil fuel industry. BlackRock stated that it is one of the largest investors in energy companies globally. Northern Trust emphasized its investment exposure to the traditional energy sector and services it offers for managing oil, gas, and other fossil fuels. HSBC highlighted its support for energy companies and the creation of new jobs in the sector. Meanwhile, Citigroup and TD Bank did not immediately respond to requests for comment. The State Financial Officers Foundation has expressed support for Moore’s stance against the ESG movement, emphasizing the perceived risks associated with ESG investments.
Overall, Moore’s actions reflect West Virginia’s commitment to supporting the fossil fuel industry and pushing back against the ESG movement. By restricting certain financial institutions from state contracts, Moore aims to protect the state’s critical industries while promoting a free market approach. The ongoing review of the banking sector will continue to ensure that only institutions supportive of West Virginia’s industries are authorized to do business with the state.
