In West Virginia, banks cite green reviews as red credentials

A leaf sits atop a pile of coal in Youngstown, Ohio, U.S., September 30, 2020. REUTERS/Shannon Stapleton//File Photo

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July 13 (Reuters) – Seeking to continue doing business in West Virginia amid a review of energy lending policies, several major U.S. banks have cited criticism from climate activists as proof they are not boycotting fossil fuels.

The arguments – presented in documents provided to Reuters as part of a public records request – mark a new negotiation tactic for the industry in its dealings with Republican state officials pressuring banks to they continue to lend to coal, oil or gas companies. Read more

West Virginia Treasurer Riley Moore could ban six major financial institutions from doing state business. But the climate remains a hot topic for many investors, leaving banks trying to walk a middle path. Read more

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In a July 6 letter to Moore, Morgan Stanley chief legal officer Eric Grossman said the Wall Street bank was not penalizing fossil fuel companies. Grossman noted that the bank was labeled one of the top fossil fuel financiers “Dirty Dozen” in a recent report by environmental group Rainforest Action Network.

“In reviewing this report, we believe it is impossible to conclude that Morgan Stanley is engaging in an ‘energy company boycott,'” Grossman wrote. A company representative declined to comment further.

In a July 7 letter to Moore, Goldman Sachs Group Inc Chief Executive Beverly O’Toole noted his inclusion in the same report, “In support of the company’s extent of engagement with energy companies “.

The report found that Goldman Sachs had provided $119 billion in fossil fuel financing since 2016, O’Toole wrote. A Goldman representative declined to comment further.

In similar correspondence to Texas officials, Morgan Stanley and other banks had previously not cited environmentalists’ concerns, but rather factors such as their fiduciary duty or reputational risks. Read more

A spokesperson for Moore said his office would not comment on the bank statements until its review is complete.

A letter to U.S. Banks last November sent by Moore urging banks “to provide funding on an unbiased, non-political basis.”

Ben Cushing, campaign manager for the Sierra Club, which helped produce the Rainforest Action Network report, said pressure from investors and customers will continue on financial firms to take climate issues into account. Read more

The idea of ​​banks ‘boycotting’ energy companies is just the latest flavor of climate denial,” Cushing said via email.

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Reporting by Ross Kerber; edited by Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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