The Texas Senate is considering a bill that would punish companies that divest from fossil-fuel companies by requiring the state's pension plans and investment funds to divest from those companies.
Senate Bill 13, introduced Thursday by lead sponsor Republican state Sen. Brian Birdwell, would require state pension plans and investment funds to stop investing in companies that "boycott energy companies."
The bill calls for the state's comptroller to "prepare and maintain, and provide to each state governmental entity, a list of all companies that boycott energy companies." Those companies will then be warned by the state funds that they're on this list and have 90 days to amend their positions. If after 90 days these companies do not change their positions, then the state funds "shall sell, redeem, divest, or withdraw all publicly traded securities of the company."
Exceptions can and will be made if divesting from the holdings will materially hurt the state funds' performance.
The funds cited in the bill include the $155.2 billion Texas Teacher Retirement System, $35.7 billion Texas County & District Retirement System, $35.2 billion Texas Permanent School Fund, $31.5 billion Texas Municipal Retirement System, $30.9 billion Texas Employees Retirement System, $116 million Texas Emergency Services Retirement System, all based in Austin.
This bill counters the recent trend within the industry of institutional investors divesting from energy companies. BlackRock Chairman and CEO Laurence D. Fink announced in his annual letter to CEOs in January that the money manager is committing to achieving net-zero greenhouse gas emissions by 2050 and is urging other companies to do the same.
Texas is the largest provider and refiner of crude oil in the U.S., according to the non-profit Texas Economic Development Corp.