Attorney General Ken Paxton says Texas is joining a multi-state investigation of the biggest names in banking over whether the financial institutions agreed to block credit to companies involved in fossil fuel-related activities.
The attorney general said Wednesday that he believes the banks — Bank of America, Wells Fargo, Morgan Stanley, JPMorgan Chase, Goldman Sachs and Citigroup — each pledged that their lending practices would reach net-zero greenhouse gas emissions by 2050.
That agreement under the Net Zero Banking Alliance could violate consumer protection laws because it would “starve” certain companies of credit on national and international markets, Paxton said.
“The radical climate change movement has been waging an all-out war against American energy for years, and the last thing Americans need right now are corporate activists helping the left bankrupt our fossil fuel industry,” Paxton said in a statement.
None of the six banks nor the attorney general’s office responded to a request for comment.
Texas is the top state in the U.S. for energy production, with oil and gas companies employing some 290,000 workers.
But the banks targeted by Paxton also are among the state’s largest employers. Texas is the second biggest employment base outside New York for both Bank of America and JPMorgan. Also, Wells Fargo and Goldman Sachs recently announced North Texas projects involving thousands of workers.
“If the largest banks in the world think they can get away with lying to consumers or taking any other illegal action designed to target a vital American industry like energy, they’re dead wrong,” said Paxton, a two-term incumbent who is up for reelection on Nov. 8.
The attorney general’s office sent a civil demand to each bank, requesting a long list of documents, including all communication related to decisions to join global climate initiatives.
Many of the documents requested involve the economic impact of transitioning companies served by the banks to net-zero by 2050. Paxton said he also wants to determine if the banks made companies take certain pledges related to any environmental goal beyond what the law requires.
Texas political leaders have made Wall Street a frequent punching bag over everything from adherence to state gun laws to labeling finance firms as “energy boycotters.” Several firms have lost municipal bond deals in the state as a result.
Paxton’s action follows two similar multi-state investigations that his office joined earlier this year to “ensure that companies basing decisions on [environmental, social and governance] factors are not violating state and federal laws to push a radical social and climate agenda.”
In September, he joined an investigation into whether S&P Global’s use of environmental, social and governance factors in credit ratings politicizes “what should be a purely financial decision,” potentially violating consumer protection laws.
In August, he joined a probe into investment research firm Morningstar and its subsidiary, Sustainalytics, for possibly violating consumer protection laws, as well as anti-boycott laws.
