Leading financial institutions have denied claims from the states of West Virginia and Arkansas that they engage in alleged “boycotts” of fossil fuel companies.

In June, West Virginia State Treasurer Riley Moore announced that he had sent notices to BlackRock, JP Morgan Chase, Wells Fargo, Morgan Stanley, U.S. Bancorp, and Goldman Sachs, warning they could be placed on the state’s restricted financial institution list for appearing to be “engaged in boycotts of fossil fuel companies.”

Senate Bill 262 authorizes the Treasurer’s Office to create a restricted financial institution list consisting of companies that have publicly stated they will refuse, terminate, or limit doing business with coal, oil, or natural gas companies “without a reasonable business purpose.”

Financial institutions featured on the exclusion list may be ineligible for contracts for state banking services, ensuring that they are not entrusted with state revenue and taxpayer dollars.

Arkansas State Senator Thomas Cotton also wrote to BlackRock CEO Larry Fink on July 13, condemning the world’s largest fund manager for “acting like a climate cartel” through its involvement in the Climate Action 100+ initiative, an investor coalition that calls on carbon-intensive companies to reduce their emissions.

Fund managers have been quick to deny claims of boycotting fossil fuel firms. In its recent letter, BlackRock said that its role is to help companies “navigate investment risks and opportunities” and it “never dictate[s] particular investment strategies.”

“When BlackRock decides not to make an investment in a particular company, it does so for a reasonable business purpose,” the letter reads. “In 2020, BlackRock took an investment decision in discretionary active investment portfolios to exit public debt and equity investments in businesses generating greater than 25% of revenue from thermal coal. Our portfolio managers concluded that the long-term economic or investment rationale no longer justifies continued investment in these businesses. This is not a policy prohibiting investment in energy companies.”

JP Morgan described it as “regrettable” that West Virginia is “cutting itself off from parts of the market and attempting, via government action, to control the decisions made by private businesses,” while Wells Fargo said it intends to continue to be a “leading provider of financing to energy companies around the world.”