Big investment banks remain on Oklahoma's revised list of fossil fuel boycotters

Oklahoma revised its list of financial firms determined to be boycotting the fossil fuel industry, shrinking the number to six from 13 with three large municipal investment banks remaining on it. 

Bank of America, JP Morgan Chase, and Wells Fargo were on an initial list released by state Treasurer Todd Russ in May and will still be ineligible to do business, including municipal bond underwriting, with the state and local governments. 

"These financial companies are using [environmental, social and governance] policies to promote a political, social agenda instead of allowing the free enterprise system to work," Russ said in a statement Tuesday announcing the revised list. "When a state boycotts a major industry like oil and gas, the result is less diversification of funds, which can lead to more risks and potentially lower returns for investors."

Oklahoma Treasurer's Office

Under 2022's Oklahoma Energy Discrimination Elimination Act, the treasurer was tasked with compiling a list of financial firm boycotters for divestment purposes by state retirement systems. The law also prohibits state and local government contracts valued at $100,000 or more with companies that boycott.

Wells Fargo's placement on the list led to its resignation in May as lead underwriter in a $500 million Oklahoma Turnpike Authority revenue bond issue. RBC Capital Markets was tapped as senior underwriter for the bonds that have yet to be priced.

A Wells Fargo spokeswoman declined to comment on the bank remaining on Oklahoma's list.

JP Morgan called the treasurer's decision "baseless."     

"As the nation's largest bank, we are among the top financers across the energy sector, including traditional and clean energy sources," a statement from the bank said. "Our business practices are not in conflict with this anti-free market decision, and we look forward to continuing to serve customers and communities in Oklahoma."

Also declining to comment was Bank of America, which was the state's top underwriter in the first half of 2023, according to Refinitiv data.

The initial list included several firms that didn't provide by an April 1 deadline a written verification they do not boycott Oklahoma energy companies, but later responded, according to the treasurer's office. The law requires at least annual updates of the boycotter list.

An anti-ESG backlash gained steam this year with a big increase in the number of bills introduced in state legislatures aimed at protecting the oil and gas, firearm, and other industries and companies from boycotts or discrimination. S&P Global Ratings recently backed away from ESG credit indicators in public finance, announcing no new or updated indicators will be released. The rating agency published indicators for states and territories in March 2022.