Oklahoma bars 13 firms from state business due to ESG policies.

The Battle Between Oklahoma and Financial Companies

What You Need to Know

Oklahoma’s fight against financial companies that boycott energy companies has entered a new phase. Treasurer Todd Russ has listed 13 companies that are banned from doing business with the state. However, don’t expect any immediate action. These companies have 90 days to inform the state that they have stopped boycotting energy companies. If they haven’t, the state has six months to divest itself of 50% of investments with the financial company and a full year to divest 100%.

The Law Behind the Restrictions

The restrictions are based on a law passed by the Legislature in 2022 that requires the state treasurer to divest Oklahoma from any financial institutions that boycott the energy industry. Russ sent a letter to 160 companies in February to verify their stance on fossil fuels.

Responses from Financial Companies

JPMorgan Chase, one of the 13 listed companies that does business with the state, called the designation “baseless” in an email response to The Center Square. Blackrock, which manages more than $200 billion in investments in traditional U.S. energy companies, said in a statement that it looks forward to engaging with the Oklahoma Treasurer to discuss how BlackRock serves its clients’ interests in Oklahoma and elsewhere.

Concerns About the Cost

Oklahoma’s bill mirrors ones passed in several states that ban agencies from doing business with financial institutions that use environmental, social or governance criteria when making decisions. However, some have raised concerns about how much it will cost the states. A report from The Brookings Institution released last month said Texas’ ESG policies could cost the state “$300-$500 million in additional interest on the $31.8 billion borrowed during the first eight months following the implementation of the law.”

The Economic Impact

The cost in Oklahoma is not yet known, according to Jordan Harvey, Russ’ chief of staff. However, even if the state does have to divest itself from some companies, others are expressing interest. “Economically, we are really strong,” Harvey said. “The treasurer is really confident that even some of our own Oklahoma banks will step in.”