Texas officials have added NatWest Group to a growing list of financial firms accused of boycotting energy companies, a move that could limit the UK bank’s business with the oil-rich US state.

The high street banking group is the latest target of Texas comptroller Glenn Hegar, who has been identifying companies that restrict their dealings with fossil fuel firms.

NatWest has announced that by 2026, it will not renew, refinance, or extend existing reserve-based lending specifically for financing oil and gas exploration, extraction, and production. This policy is part of NatWest’s broader sustainability efforts to end activities that significantly contribute to the climate crisis. The lender’s website states that this policy aims to “end the most harmful activity” fuelling the climate crisis.

This stance places NatWest among other financial services companies on Texas’s divestment statute list, including BlackRock, HSBC, UBS, and Société Générale. The list, titled “financial companies that boycott energy companies,” stems from a 2021 law aimed at protecting Texas’s oil and gas sector. The law mandates that Texas agencies must either cease doing business with companies divesting from the oil and gas industry or justify their continued dealings with these firms.

NatWest, Royal Bank of Scotland, is understood to have limited exposure to Texas. The bank is yet to comment on the matter.

Hegar’s decision is part of a broader crackdown on companies’ environmental, social, and governance (ESG) policies by the oil-friendly state. Texas has also pressured financial companies to withdraw from international initiatives that encourage signatories to reduce their greenhouse gas emissions. In February, Hegar welcomed news that JP Morgan and State Street Global Advisors had exited Climate Action 100+, criticising the ESG movement for prioritising politics over profits and causing financial firms to neglect their fiduciary duties to clients.

These Texas policies contrast sharply with the trends in mainland Europe and the UK, where there is a growing push for more climate-friendly policies from financial institutions. Governments in these regions are increasingly focused on limiting global heating to 2 degrees above preindustrial levels.

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