Jul 30, 2022
CHARLESTON — Five major financial institutions are now ineligible for state banking contracts due to their environmental policies, being placed on West Virginia’s first Restricted Financial Institution list.
West Virginia State Treasurer Riley Moore announced Thursday that BlackRock Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co. are engaged in boycotts of fossil fuel companies, according to a new state law, and are no longer eligible to enter into state banking contracts with his office.
A sixth company, U.S. Bancorp, was initially identified as potentially engaging in boycotts of energy companies, but Moore said it stayed off the list after it demonstrated to the treasurer’s office that it has eliminated policies against financing coal mining, coal power and pipeline construction activities from its Environmental and Social Risk Policy.
“As treasurer, I have a duty to act in the best interests of the state’s treasury and our people when choosing financial services for West Virginia,” Moore said. “Any institution with policies aimed at weakening our energy industries, tax base and job market has a clear conflict of interest in handling taxpayer dollars.”
State lawmakers earlier this year passed a bill that authorized the state treasurer to publish a restricted financial institution list on the office’s website and disqualify any financial institution on the list from state banking contracts.
In preparing the list, the treasurer’s office reviewed publicly available environmental and social policy statements published by financial institutions that are currently authorized to do business with his office as approved state depositories or sweep account providers for the state’s short-term funds.
The original six financial institutions flagged were given written notice and had 30 days to submit additional information disputing their potential inclusion on the Restricted Financial Institution List. All six submitted responses, which the treasurer reviewed alongside each institution’s public policy statements.
“Each financial institution placed on the Restricted Financial Institution List … has published written environmental or social policies categorically limiting commercial relations with energy companies engaged in certain coal mining, extraction or utilization activities, rather than considering the financial or risk profile for each company,” Moore said. “These policies explicitly limit commercial engagement with an entire energy sector based on subjective environmental and social policies.”
West Virginia annually collects hundreds of millions of dollars in coal and other fossil fuel severance taxes, typically representing the third-largest revenue source for the state’s General Revenue Budget.
During the most recent fiscal year, the nearly $769 million in severance taxes paid by coal, oil and natural gas companies accounted for 13% of the $5.89 billion in general revenue funds collected by the state. That does not include income and other taxes also collected from the employment and economic activity these fossil fuel industries generate.
According to the treasurer’s office, a recent report by the West Virginia University College of Business and Economics found that in 2019, coal mining and coal-fired power generated $13.9 billion in total economic activity and supported nearly 33,000 jobs in West Virginia.
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