AUSTIN – Texas has enacted a ban on its public pensions from investing in funds managed by companies such as BlackRock (NYSE:) and Invesco. Despite the prohibition, analyses reveal that the funds in question from BlackRock and Invesco maintain considerable investments within the sector they are accused of shunning.
The new policy, which came into effect on Thursday, aims to protect the state’s significant interests in the energy sector, particularly oil and gas. Texas officials argue that the investment firms’ strategies could harm the state’s economy by undermining a crucial industry. This move reflects the state’s stance against what it perceives as discriminatory practices against the oil and gas industry.
Interestingly, a closer look at the composition of the banned funds indicates that both BlackRock and Invesco have not entirely divested from oil and gas. In fact, BlackRock’s restricted funds still hold substantial stakes in oil and gas companies, which suggests that the funds’ investment strategies may not align with the allegations that prompted the ban. Similarly, an Invesco fund also shows a significant position in the sector.
The ban has sparked a debate over the role of investment firms in addressing climate change and the transition to renewable energy sources, with some advocating for a more environmentally sustainable approach to investing. Meanwhile, others argue for the financial importance of the oil and gas sector, especially in regions like Texas where it is a major economic driver.
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