Mr. Hegar was required to prepare the list in accordance with Senate Bill 13, which became law in September 2021. Listed companies are subject to the divestment provisions included in Texas Government Code Chapter 809, which, as the release noted, defines a financial company as a publicly traded financial services, banking or investment company.
The environmental, social and governance investing movement has produced a system in which some financial companies have stopped making decisions that are in the best interests of their shareholders or clients, but instead use their "financial clout" to push a social and political agenda cloaked in secrecy, Mr. Hegar said in the release.
However, Mr. Hegar wasn't the only one to detect a whiff of politics.
"Let's be honest: This is entirely performative," said Dave Nadig, a Lenox, Mass.-based financial futurist at VettaFi LLC, a data and analytics provider, of the law. "This won't make one bit of difference in the valuation of any energy company, and it won't put one more well in the ground, but I'm sure it makes for great fundraising."
State governmental entities subject to the divestment requirements include the $184.4 billion Teacher Retirement System of Texas and the $33 billion Employees Retirement System of Texas, both based in Austin. According to their 13F reports filed with the Securities and Exchange Commission for the quarter ended June 30, TRS and ERS held roughly $436 million worth of investments in iShares ETFs and $32.4 million of BlackRock stock between them.
A 13F report wasn't available for the roughly $45 billion Texas County and District Retirement System, which is also among entities subject to the divestment requirements. Asked why a 13F report wasn't available, a TCDRS spokesman said it doesn't hold a lot of direct investments and consequently doesn't meet the threshold for reporting.
Regarding Mr. Hegar's list, "TCDRS has no direct holdings in the companies identified in the comptroller's letter of August 24, 2022, concerning financial companies that boycott energy companies pursuant to Chapter 809 of the Texas Government Code," the spokesman said.
In a statement, BlackRock disagreed with the comptroller's opinion, saying it wasn't based on fact.
"BlackRock does not boycott fossil fuels — investing over $100 billion in Texas energy companies on behalf of our clients proves that," the money manager said in its statement, which also said elected and appointed public officials have a duty to act in the best interests of the people they serve. "Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty."