The Office of the Attorney General (“OAG”), announced that Barclays would no longer be permitted to underwrite Texas’s municipal bonds after failing to respond to requests for information concerning its “net zero” carbon emissions commitments.

In an All Bond Counsel letter sent by the Office of the Attorney General on November 1, Barclays was identified as having a standing letter with the OAG while also being a Net Zero Alliance member or affiliate. This raised concerns that Barclays’ activities may require it be classified as a “fossil fuel boycotter” under Texas law. When asked for more information concerning its ESG commitments, Barclays elected not to respond to the questions and acknowledged that by doing so it would likely forfeit its ability to contract with Texas governmental entities.

Therefore, in accordance with Texas law, the OAG’s Public Finance Division issued an All Bond Counsel Letter explaining that, “until further notice, we will not approve any public security issued on or after today’s date in which Barclays purchases or underwrites the public security or is otherwise a party to a covered contract relating to the public security.” Additionally, the letter notes, “As of today, we have not heard from any of the remaining banks under review that they will not be able to respond to our inquires.”

The OAG will ensure that Texas law is complied with while helping Texas maintain the best municipal bond market in the country. The OAG looks forward to working with all potential underwriters and issuers to make sure that they are in compliance with Texas law.

Attorney General Ken Paxton has aggressively enforced Texas laws safeguarding vital industries against ESG policies pushed by major corporations that would weaponize the powerful financial industry against the interests of this state. Recently, a major financial services company abandoned ESG ratings altogether after an investigation by Attorney General Paxton.

“The Office of the Attorney General will continue to vigorously enforce our laws that prevent taxpayer funds from going to companies whose ‘ESG’ policies harm Texans or key Texas industries,” Attorney General Paxton explained.

To read the letter, click here.