Five major banking institutions are facing major penalties in the state of West Virginia based on their attempts to prevent investment in the fossil fuel industry. JPMorgan Chase, Wells Fargo, Blackrock, Goldman Sachs, and Morgan Stanley were banned from new state business following an investigation which exposed them as having “categorically limited commercial relations with energy companies engaged in certain coal mining.”
The move, made legal through a state law passed earlier this year, is expected to cost the banks up to $18 billion annually.
“At the end of the day, all we want is for banks to act like banks,” said West Virginia State Treasurer Riley Moore, who referred to the financial institutions’ boycott-like behavior as “economic extortion.”
West Virginia’s decision comes amid a GOP-led push to counteract the pressure on financial institutions and other companies to pursue “woke” stances on issues like climate change and firearms. Though West Virginia is the first state to take direct action against Wall Street financial institutions regarding their stance on climate change, Texas has passed a similar law banning banks from new state business for discriminating against gun makers.
Democrats are pushing hard for the elimination of fossil fuels, but what they often fail to mention is the impact on the coal mining industry – which accounts for more than 11,000 jobs in the state of West Virginia alone. Coal miner engineers make roughly $90,000 per year and the state earns hundreds of millions of dollars annually in severance taxes from coal extraction.
“Any institution with policies aimed at weakening our energy industries, tax base, and job market has a clear conflict of interest in handling taxpayer dollars,” argues Moore. “I simply cannot stand by and allow financial institutions working against West Virginia’s critical industries to profit off the very funds their policies attempt to diminish.”
All five of the banned banks claimed they were doing nothing to block investment in the fossil fuel industry and argued they were under pressure to do more to ease the transition from coal to renewable energy.
“BlackRock does not boycott energy companies,” said a spokesman. “And we do not pursue divestment from sectors and industries as a policy.”
“This decision is shortsighted and disconnected from the facts,” added a representative for JPMorgan Chase. “Our business practice are not in conflict with this anti-free market law.”
US Bancorp narrowly escaped the ban by agreeing to remove policies against financing coal production.
Author’s Note: The banks impacted by West Virginia’s ban are some of the largest financial institutions in the world and they certainly have the power to buy enough of a company to control its board and then change its policies in order to restrict investments in coal, oil, and gas. Apparently this is what they have been doing and West Virginia is right to put a stop to it.
Sources:
West Virginia bars five financial firms for deemed fossil fuel ‘boycotts’
West Virginia Won’t Do Business With Wall Street Banks That Boycott Fossil Fuels
West Virginia Penalizes Banks Including JPMorgan, Goldman for Coal ‘Boycotts’