By Isla Binnie
NEW YORK (Reuters) -West Virginia added four financial firms on Monday to a list of institutions that may be barred from some state business because the state’s treasurer deems they are boycotting the fossil fuel industry.
It was the latest move in a bubbling dispute between Republican officials and Wall Street firms over use of environmental, social and governance (ESG) factors in banking and business.
West Virginia, a major energy-producing state, created the list in 2002, placing five firms on it at the time.
On Monday state Treasurer Riley Moore, said that Citigroup, HSBC Holdings (NYSE:), TD Bank and the Northern Trust (NASDAQ:) Co had been added to the list.
Moore’s office says the list is for firms that “have publicly stated they will refuse, terminate or limit doing business with coal, oil or companies without a reasonable business purpose.”
A Northern Trust spokesperson said the asset and wealth manager “does not restrict or prohibit investment in fossil fuel-based energy companies.” He said Northern Trust has around $52 billion in investment exposure to companies in the traditional energy sector as of February 2024.
HSBC seeks “to work with – not boycott – energy companies,” a U.S.-based spokesperson said via email. The bank expects to continue corporate lending and capital markets transaction support to “energy-based customers”, the spokesperson continued.
Citi declined to comment. TD Bank did not immediately respond to a request for comment.
Financial firms also face pressure from the other side of the ESG debate, with environmental activists and investors pushing them to stop financing new projects in areas like oil and gas.
