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Keeping you in-the-know on environmental, social and governance developments

ESG is clearly becoming highly politicized (I’ll be blogging more on that soon). Florida earlier this week “passed a resolution directing the state of Florida’s fund managers to invest state funds in a manner that prioritizes the highest return on investment for Florida’s taxpayers and retirees without considering the ideological agenda of the environmental, social, and corporate governance (ESG) movement.” 

But even that isn’t the most aggressive move made by a state.

Also earlier this week, the Texas Comptroller of Public Accounts published their list of 10 specific financial service companies considered to be “boycotting energy companies” as determined after the State’s review of responses to letters sent to a number of companies in March of this year. The letters and initiative have their basis in Texas Government Code Chapter 809, passed by the Texas Legislature last year. The spreadsheet available from the Comptroller’s website also includes a list of 348 investment funds that the State apparently believes also meet the criteria.

Along with the list of companies, the Comptroller provided an 11-page FAQ document. Many of the Q&As discuss the process undertaken and information considered by the State in making their determinations. The two most interesting ones to me are:

12. I know of a specific company or fund that I believe should be on the list but isn’t. Why not? The Comptroller examined many data points and factors in preparing the list. A quick glance at many financial companies in the investment industry and considering only one factor (such as public pronouncements, or number of “ESG” funds) will easily give the mistaken impression that the entity should have been on the list. Additionally, as demonstrated in the variation of responses reviewed by the Comptroller’s office, financial companies have different and non-uniform understanding of ESG principles and fossil-fuel negative screens. The fund names can be misleading. The Comptroller does, however, recognize that the list may have omitted an entity or fund. Nonetheless, we encourage all users and observers of the list to examine all the factors we reviewed before concluding that an entity should have been on the list.

13. Did the Comptroller’s office consider proxy voting when creating the list?

While the Comptroller’s office recognizes that the proxy votes of some asset managers and public companies are concerning as such votes apply to the fossil-fuel energy industry, it did not consider these as factors in the listing process. Due to the amount of voting data required to be reviewed and to ensure consistency in the process (i.e., some entities reviewed would not be responsible for voting proxies), the Comptroller’s office decided not to review proxy votes for this list. However, the team is presently exploring the possibility of incorporating proxy voting into the list creation methodology for future iterations of the list.

The answer to Question 12 acknowledges the variation in fund names and actual implementation of ESG factors that many consider to be a foundation of greenwashing and why the SEC issued a pair of proposals this past May concerning fund names and detailed disclosures of ESG factor usage. On the issue of proxies, it is worth noting that the State may expand their criteria to include proxies. I’m looking forward to commentary on that point from my colleague John Jenkins at

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The Editor

Lawrence Heim has been practicing in the field of ESG management for almost 40 years. He began his career as a legal assistant in the Environmental Practice of Vinson & Elkins working for a partner who is nationally recognized and an adjunct professor of environmental law at the University of Texas Law School. He moved into technical environmental consulting with ENSR Consulting & Engineering at the height of environmental regulatory development, working across a range of disciplines. He was one… View Profile