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Illustration: Annelise Capossela/Axios

More than a dozen Republican state treasurers are threatening to pull assets from large financial institutions if they agree to decarbonize their lending and investment portfolios, Axios has learned.

Why it matters: The Biden administration — led by special presidential climate envoy John Kerry — has leaned on the banks to help reduce U.S. carbon emissions. That's prompted GOP lawmakers to criticize efforts to "de-bank" fossil fuel firms. The treasurers collectively control hundreds of billions worth of assets.

  • Fifteen of them, led by coal-heavy West Virginia, say they're prepared to use this financial muscle to push back.
  • The effort includes treasurers from other states with large energy industry presences such as North Dakota, Kentucky, Pennsylvania and Oklahoma.

What's happening: The state officials sent a letter on Tuesday to Kerry, who's leading the administration's efforts to enlist banks in its climate policy fight.

  • "We intend to put banks and financial institutions on notice of our position, as we urge them not to give in to pressure from the Biden administration to refuse to lend to or invest in coal, oil and natural gas companies," the officials wrote.
  • In an interview with Axios, West Virginia state Treasurer Riley Moore said he was prepared to terminate contracts with banks that pull back their fossil fuel industry lending in response to administration pressure.
  • "Frankly, it is not fair for the people of West Virginia to allow a bank to handle our money when they're diametrically opposed to our way of life," Moore said.

What they're saying: Moore called the issue "a matter of life and death for my people."

  • He said coal and gas operators in his state have reported difficulties obtaining financing from banks blaming pressure from the Biden administration to try to "green" their portfolios.
  • "If you just cut these guys off at the knees — gas and coal in a state like West Virginia — and they can no longer conduct their business ... it is going to destroy us," Moore said. He cited the industries' heavy jobs footprint and contributions to the state's tax base.
  • "At no point has Secretary Kerry pressured financial institutions into making commitments," a State Department spokesperson said in an emailed statement. "On the contrary, many financial institutions have reached out to Secretary Kerry to initiate conversations regarding the financial risks and potential opportunities related to climate change."

Between the lines: The state officials signing the letter collectively manage more than $600 billion in assets in state treasuries, pension funds and other government accounts, according to publicly available financials and information provided by the state treasurer offices.

  • Those states work with large financial institutions to invest and grow those funds, to support state spending and retirement payments to former workers.
  • Even for sizable investment banks, such funds can be some of their largest accounts.

Editor's note: This story has been updated with comments from the State Department.

Go deeper

Ben Geman, author of Generate
Sep 1, 2021 - Energy & Environment

Treasury hopes to tackle climate insurance risks

Homes, cars and streets are overwhelmed by water in Lafitte, Louisiana, after Hurricane Ida. Photo: Michael Robinson Chavez/The Washington Post via Getty Images

The Treasury Department just launched a new effort to grapple with how climate change is affecting the insurance market and, by extension, financial markets more broadly.

Driving the news: Treasury, via the Federal Insurance Office, is soliciting information on topics like data needed to measure and assess the sector's climate-related risk exposures and "climate-related issues or gaps in the supervision and regulation of insurers."

GOP Rep. Gonzalez retires in face of Trump-backed primary

Ohio Rep. Anthony Gonzalez (R) Photographer: Stefani Reynolds/Bloomberg via Getty Images

Ohio Rep. Anthony Gonzalez (R) announced his retirement on Thursday, declining to run against a Trump-backed primary challenger in 2022.

Why it matters: Gonzalez has suffered politically since siding with House Democrats to impeach the 45th president after the Capitol riot.

Swing voters oppose Texas abortion law

Protesters at a rally at the Texas State Capitol. Photo: Jordan Vonderhaar/Getty Images

All 10 swing voters in Axios’ latest focus groups — including those who described themselves as "pro-life" — said they oppose Texas' new anti-abortion law.

Why it matters: If their responses reflect larger patterns in U.S. society, this could hurt Republicans with women and independents in next year's midterm elections. The swing voters cited overreach, invasion of privacy and concerns about frivolous lawsuits jamming up the courts.