Texans are paying for state shutdown when firms stop investing in firearms: NPR

Texas laws bar Wall Street firms from operating in the state if they stop investing in firearms and fossil fuels. An analysis shows it has cost taxpayers hundreds of millions of dollars this year.


Texas is banning state and local agencies from doing business with financial firms they say are, quote, “boycotting the arms and fossil fuel industries.” It’s a move other Republican-led states are following. But experts say the change in Texas is already costing taxpayers hundreds of millions of dollars. Texas Public Radio’s David Martin Davies reports.

DAVID MARTIN DAVIES, BYLINE: Texas Republican Representative Phil King introduced his bill a year ago last April, saying it would prohibit Wall Street firms from discriminating against the fossil fuel industry.


PHIL KING: Wealthy investment managers are denying capital to energy companies, using their money and power with one simple goal in mind – the destruction of the oil and gas industry. This bill sends a strong message to both Washington and Wall Street that if you boycott Texas Energy, then Texas will boycott you.

DAVIES: King’s bill prohibits Texas agencies from investing in companies that choose not to invest in fossil fuel companies because of the financial cost of climate change. Minutes later, the same committee heard a proposal for a similar bill from State Representative Giovanni Capriglione, this one aimed at firms leaving the arms industry.


GIOVANNI CAPRIGLIONE: I’m here to talk to you today about House Bill 2558, which prevents discrimination in firearms lending by banks. This bill is supported by the National Shooting Sports Foundation and the National Rifle Association.

DAVIES: Capriglione argued that cutting off capital and banking services to the arms industry threatens the Second Amendment. Both of these bills passed and Texas Governor Greg Abbott signed them into law. They target ESG, or environmental, social and governance policies. These are policies, companies say, that are good business because they address the risk they face from things like climate change. But Texas Comptroller Glenn Hegar called ESGs a dark and perverse system where financial companies use their influence to push a social and political agenda. Last week, Hegar barred 10 firms from doing business with Texas after he determined they don’t support the fossil fuel industry enough, including BlackRock, Goldman Sachs and JPMorgan.

DANIEL GARRETT: The bottom line is it’s costing Texans.

DAVIES: Daniel Garrett of the Wharton School at the University of Pennsylvania studied the impact of Texas’ anti-ESG laws on the state’s municipal bond borrowing. He says five major lenders walked away from the Texas municipal bond market because they wouldn’t support the production of AR-15-style weapons, the type of weapon used in the Uvalde school massacre.

GARRETT: Banks definitely think they have an impact. They think these policies are worth leaving Texas for.

DAVIES: Garrett estimates the Texas laws have reduced competition and cost Texas taxpayers an extra $300-500 million so far this year in extra interest. However, those firms are sticking to their ESG policies.

For NPR News, I’m David Martin Davies in San Antonio.

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