West Virginia Treasurer Riley Moore has revealed that HSBC, Citi, Northern Trust, and TD Bank are now among the financial institutions barred from providing banking services to the state. This move comes as part of the state’s efforts to counter what Republican politicians see as an encroaching ESG (Environmental, Social, and Governance) agenda. Last year, West Virginia joined forces with other states to combat the influence of ESG principles, aiming to shield individuals from what they perceive as detrimental impacts.
These banks join a list of financial institutions, including BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo, deemed to be engaging in what the state views as “boycotts” against fossil fuel companies. The Restricted Financial Institution List, established by the state legislature in 2022, targets firms that are seen to be unfairly limiting business activities with coal, oil, or natural gas companies without valid business reasons. Inclusion on this list may render banks ineligible for state banking contracts.
The Treasurer’s office said that the determination was made based on the banks’ ESG policies and other statements.
Moore said:
We cannot allow institutions that seek to destroy our state’s critical energy industries and the economic activity they generate to also profit from handling the very taxpayer dollars they seek to diminish. My action today represents our continued commitment to protect state funds from furthering these politically motivated, subjective ESG policies that attempt to cut off financing for our coal, oil and natural gas industries and harm our state.
As per the Treasurer’s office, the recently added banks were among six institutions notified in February about the possibility of being included on the list. They were given a 30-day window to furnish evidence showing that they were not involved in boycotting fossil fuel companies. While BMO and Fifth Third Bank were also notified, they were not included on the final list.
Following the announcement, Citi expressed disappointment with the Treasurer’s decision and stated that it disagreed with the designation in a released statement.
Citi added:
Citi is not engaged in a boycott of energy companies as evidenced by the fact that we continue to lend to these companies and have substantial credit exposure to the industry. We believe our policies are consistent with our regulatory requirements regarding risk management as well as with West Virginia law.
A HSBC spokesperson in the U.S. said:
We seek to work with – not boycott – energy companies. Our policies anticipate that we will continue to provide corporate lending and capital markets transaction support to energy-based customers to both maintain supplies as well as support an orderly and just transition that helps with the creation of new jobs. We are supportive of energy companies throughout the United States, whom we are pleased to have as clients.
