One of the most powerful CEOs in America has some very nice thing to say about Texas’s business environment, but (gently) rebuked the state for recent laws punishing companies as part of a culture war.
Jamie Dimon is CEO of JPMorgan Chase, and his company is one of several big finance firms currently being investigated by Attorney General Ken Paxton. Their crime? Joining the Net-Zero Banking Alliance, a coalition of global banks that pledge to reduce greenhouse emissions in their companies to net-zero by 2050.
The group was convened by the United Nations as part of the fight against global man-made climate change. The American baking industry produces nearly 2 billion tons of carbon annually through its financing and would be the fifth largest producer of carbon worldwide if it were a country. Carbon emissions are the driving force behind global man-made climate change and the subsequent extreme weather events that have become more numerous in the last several decades.
In practice, this means that JPMorgan Chase and other banks pledge to transition their investment portfolios toward projects that reduce carbon output. That likely includes moving away from the fossil fuel energy sector.
Obviously, this is a threat to the oil and gas industry, which is a major part of the Texas economy and the Republican funding machine. In 2021, the state legislature passed several laws prohibiting banks and finance companies from “discriminating” against businesses. These included avoiding oil and gas companies in favor of green energy ones, as well as refusing to add gunmakers to their portfolios.
Though not part of the two laws passed, Paxton has also been investigating companies for diversity initiatives. Earlier this year, Texas did away with diversity offices in all of its state-run universities, and seems keen on attacking diversity programs wherever it can claim white men are being denied positions.
Dimon spoke to Bloomberg on Wednesday regarding the investigations. He mostly praised the Lone Star State for its business-friendly environment, but warned that these new laws were a mistake.
“Texas is a wonderful, welcoming place,”Dimon said. “The government’s done a magnificent job, and that’s why you have the growth, why unemployment is so low, why people are moving companies and jobs here. I think it’s a mistake to damage it even a little way. We don’t discriminate or boycott anybody, neither for political affiliation nor for anything else. We do make risk, legal, credit and reputational decisions, which is our legal right — and my obligation as chairman and CEO of JPMorgan Chase.”
It is true that no bank discriminates against oil and gas or gun companies. These are not people and do not form a protected class. Dimon and other CEOs are as free to refuse investment from them as they would be to refuse investing in any other company.
While Dimon’s pushback was the lightest of taps, it’s clear he wants Texas to stop waging culture wars through messing with the finance industry. Thus far, this interference has already cost the state billions thanks to contracts having to be renegotiated once companies were deemed too “woke” for the current law.