Texas Bans Barclays from Underwriting Municipal Bonds Over ESG Concerns

Texas Attorney General Ken Paxton has barred Barclays from underwriting municipal bonds in the state, citing the bank’s failure to address questions about its greenhouse gas emission reduction pledges. Republican officials, critical of ESG investing, have been curbing the role of banks in local government debt markets over such concerns. Barclays, affiliated with a net-zero alliance, potentially faces classification as a ‘fossil fuel boycotter’ under Texas law. Despite this, the bank chose not to respond to inquiries, acknowledging the likely loss of its ability to contract with Texas governmental entities. Texas, a conservative stronghold, maintains a list of financial firms boycotting energy companies and has been actively challenging a Biden administration rule allowing socially conscious investment in retirement plans. The move underscores the growing scrutiny of financial institutions regarding their environmental commitments in the evolving landscape of ESG considerations.