The findings will expose the firms to possible divestment by state pension funds. Scores of individual funds were also listed as boycotting the energy industry, in violation of a new state law, according to a release from Hegar's office.
While the list will not lead to immediate changes in fund holdings, Wall Street has been watching for its release as a marker about how Republican state officials like Hegar will pursue a growing campaign against the use of environmental, social and governance (ESG) factors in investing.
The ESG movement has produced an opaque system in which some companies no longer make decisions in the best interest of their clients, Hegar said in a statement. In his research, Hegar said he found some companies "engage in anti-oil and gas rhetoric publicly yet present a much different story behind closed doors."
While BlackRock and other financial firms have expressed concern about issues like climate change and how it could affect portfolio companies' financial performance, they continue to hold many fossil fuel stocks and had previously argued their ESG concerns were shared by clients.
The initial list of companies focuses on European firms and notably does not include large U.S. companies including JPMorgan Chase & Co or Wells Fargo & Co, two large banks that had received initial inquiries from Hegar for potential inclusion on the list. One JPMorgan fund was included on the list, however, as were funds from other big U.S. fund providers including Vanguard Group and State Street Corp.
A JPMorgan spokeswoman said the bank looks forward to continue to do business with Texas public entities, after being effectively sidelined for months after the new state law was enacted. A spokesperson for Wells Fargo did not immediately respond to a request for comment.
Representatives for BlackRock, Credit Suisse, Vanguard and State Street did not immediately comment.
(Reporting by Ross Kerber; Editing by Josie Kao)
By Ross Kerber and Pete Schroeder
