Texas and Other Republican States Pressure Wall Street on Diversity Programs
Texas Attorney General Ken Paxton has sent letters to several major financial firms, including Goldman Sachs, JPMorgan Chase, and BlackRock, expressing concerns about their diversity, equity, and inclusion (DEI) initiatives.
Paxton alleges that these programs may violate state and federal laws prohibiting discrimination and breach fiduciary duties by prioritizing political agendas over shareholder interests. The letters request detailed information about the firms' hiring practices, supplier selections, and use of shareholder votes on environmental issues.
The move comes amid escalating tensions between Republican-led states and the Biden administration over DEI initiatives. The Trump administration had previously taken steps to limit diversity programs in federal contracting, and some states have passed legislation restricting them in other areas.
Financial firms have been increasing their focus on DEI in recent years, particularly in the wake of the Black Lives Matter movement and calls for greater corporate responsibility. Major banks have made pledges to increase hiring and investment in minority-owned businesses.
Paxton has previously led lawsuits against BlackRock and other investment firms for allegedly using climate investing strategies to suppress coal production. The latest letters also seek information about the firms' commitments to net zero emissions and their engagement with environmental groups.
The firms have 45 days to respond to the inquiries. Should they fail to provide satisfactory answers, Paxton has indicated that legal action may be taken.