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Fitzpatrick, other state treasurers warn banks over Biden administration’s climate finance push

  

State Department spokesperson says John Kerry has never pressured financial institutions to make climate commitments 

Missouri Treasurer Scott Fitzpatrick joined more than a dozen other state financial chiefs to issue a warning to the Biden administration: Banks that consider divesting from coal, oil, and natural gas are officially on notice. 

The letter from the 15 state treasurers comes as John Kerry, special presidential climate envoy, has been reportedly working his contacts with big banks to encourage greater climate efforts and other energy-related commitments. Republicans have warned the effort is an “attempt to prevent energy companies from obtaining capital.” 

Fitzpatrick said the federal government has encouraged banks to stop providing certain services to coal, oil, and natural gas companies could cause gas, energy, and consumer goods prices to rise. 

“While I get that we want, as a society, to pursue more renewable forms of energy, we can’t just ignore the fact that right now fossil fuels are what drive the energy industry for the most part. Failing to realize that or pretending that’s not the case is only going to hurt poor people more than anybody,” Fitzpatrick told The Missouri Times. “It’s totally inappropriate for the federal government to put that kind of pressure on financial institutions.”

In the letter, the state treasurers said they are putting banks and financial institutions “on notice” and urging them “not to give into pressure from the Biden administration to refuse to lend to or invest in coal, oil, and natural gas companies.” 

However, a State Department spokesperson said Kerry had not been pressuring financial institutions about climate matters. Rather, the spokesperson told The Missouri Times, those institutions had been reaching out to Kerry “to initiate conversations regarding the financial risks and potential opportunities related to climate change.”

“Financial institutions — including banks and asset managers — make their own decisions based on where they see risk and opportunity, and their recent, voluntary announcements reflect their own views about where these institutions believe demand for financing will be in the future,” the spokesperson said. “Through these announcements, financial institutions are sharing their fundamental belief that businesses essential to the transition to a net-zero carbon economy are likely to be promising clients and investment opportunities in the coming years.  In doing so, these institutions are also signaling that climate change presents both risks and opportunities to their bottom lines and to the value of their investment portfolios.”

“To ensure that our companies and banks are not put at a competitive disadvantage, and to ensure that U.S. investors are adequately protected, the United States will have to grapple with these issues quickly — at home and abroad.”

Fitzpatrick said Missouri has contracted with certain financial institutions and would “evaluate those on a case-by-case basis.” 

“I can assure you that a financial institution’s decision to choose not to participate as a lender and provider of capital to a certain institution because of political pressure will be a consideration in determining where the state of Missouri puts its money [and] invests its money,” Fitzpatrick said. 

According to Axios, the state treasurers included on the letter manage more than $600 billion together. Missouri’s investment portfolio is nearly $20 billion including Missouri State Employees’ Retirement System (MOSER) and MOST, according to the Treasurer’s Office. 

“As a collective, we strongly oppose command-and-control economic policies that attempt to bend the free market to the political will of government officials. It is simply antithetical to our nation’s position as a democracy and a capitalist economy for the executive branch to bully corporations into curtailing legal activities,” the letter, led by West Virginia Treasurer Riley Moore, said. “The Biden administration’s top-down tactics of picking economic winners and losers deprives the real determinate group in our society — the people — of essential choice and agency.” 

“We refuse to allow the federal government to pick our critical industries as losers, based purely on President Biden’s own radical political preferences and ideologies. At the outset of his administration, President Biden promised to be a president for all Americans. The pressure his administration is imposing on American financial institutions runs directly counter to that promise as it will certainly harm the most economically depressed areas in our states and the most vulnerable of our people.” 

Other state treasurers who signed the letter addressed to Kerry at the State Department included Alabama Treasurer John McMillan, Arizona Treasurer Kimberly Yee, Arkansas Treasurer Dennis Milligan, Idaho Treasurer Julie A. Ellsworth, Kentucky Treasurer Allison Ball, Mississippi Treasurer David McRae, Nebraska Treasurer John Murante, North Dakota Treasurer Thomas Beadle, Ohio Treasurer Robert Sprague, Oklahoma Treasurer Randy McDaniel, Pennsylvania Treasurer Stacy Garrity, South Carolina Treasurer Curtis Loftis Jr., and South Dakota Treasurer Josh Haeder.

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This story has been updated. It was originally published May 26.