Oklahoma’s efforts to hold investment banks accountable for their involvement in the fossil fuel industry have taken a significant step forward with the addition of Barclays to the list of boycotting institutions. State Treasurer Todd Russ recently announced that Barclays, along with Bank of America, JP Morgan, and Wells Fargo, have been deemed ineligible for state and local government contracts under the 2022 Energy Discrimination Elimination Act. This law prohibits these banks from underwriting debt sold by the state and other governmental issuers if the contracts exceed $100,000.
Barclays’ inclusion in the list highlights the challenges faced by energy companies in Oklahoma. The bank has been directly involved in financial boycotts targeting coal mining and power companies, stating that they will no longer provide project finance for new upstream oil and gas projects or related infrastructure. Moreover, Barclays expects all energy groups to produce transition plans and decarbonization strategies that go beyond the state’s requirements by January 2025.
Despite being placed on the list of boycotting banks by Oklahoma, Barclays has declined to comment on the matter. The bank’s involvement in a $230.46 million bond sale for the University of Oklahoma in April indicates its continued presence in the state. However, Barclays faced a similar ban in Texas under a law enacted in 2021 by Attorney General Ken Paxton’s office.
Impact on Borrowing Costs
A recent study revealed that Oklahoma’s Energy Discrimination Elimination Act has resulted in a significant increase in municipalities’ borrowing costs. On average, borrowing costs have risen by 59 basis points due to the restrictions placed on investment banks. Despite efforts to limit the application of the law to state agencies only, Senate Bill 1510, which aimed to do so, failed to pass in the state legislature.
The expansion of the list of investment banks boycotting the fossil fuel industry in Oklahoma has had wide-reaching implications for energy companies and government issuers. The inclusion of Barclays and other major banks on this list demonstrates the state’s commitment to addressing companies that target its industries and jobs. The impact of these restrictions on borrowing costs highlights the challenges faced by municipalities in accessing financial services. It remains to be seen how this ongoing conflict between investment banks and the fossil fuel industry will evolve in the future.