The Texas Comptroller’s office has added UK-based financial services group NatWest to a list of companies that could face divestment by the state’s pension funds. The inclusion of NatWest is due to its policy restricting financing for oil and gas projects, specifically stating that from February 2023, the bank will no longer provide reserve-based lending for new oil and gas exploration and will cease renewing or extending such lending for existing customers after December 31, 2025. This list is part of an anti-ESG (Environmental, Social, and Governance) movement in Republican-led states like Texas, which has been actively targeting financial companies it views as “boycotting” the oil and gas industry. Texas, a major energy producer in the U.S., first published the list in 2022 with 10 companies, including BlackRock and BNP Paribas.
The list has since expanded to 16 companies, now including NatWest, HSBC, Credit Agricole, and others. Despite the growing list, there has been criticism of anti-ESG efforts in Texas. A 2023 assessment by the Texas County and District Retirement System (TCDRS) found that proposed anti-ESG regulations could cost the pension system more than $6 billion in lost revenue in decade, and reduce his ability to work with managers.