(Bloomberg) -- Texas added HSBC Holdings Plc to its list of financial firms that “boycott” the fossil-fuel industry, potentially limiting what business the bank can conduct with the nation’s second-most-populous state. 

Texas Comptroller Glenn Hegar cited the firm’s recently announced policy to not provide fresh lending or financing for new oil and gas fields as he added the bank to the list, the first version of which was published in August. The 10 companies in the original group, including BlackRock Inc. and UBS Group AG, remained. 

“This is significant given HSBC’s status as Europe’s largest bank, but it should not be surprising,” Hegar said in a statement on Monday. “HSBC’s new energy policy is a prime example of a broader movement in the financial sector to push a social agenda and prioritize political goals over the economic health of their clients.”

Read more: HSBC Halts Fresh Financing for New Oil and Gas Field Projects

The list is the result of a state law, enacted in 2021, that limits Texas governmental entities from doing business with firms that restrict operations with oil and gas producers, a key industry in the Lone Star State. The legislation charged Hegar with identifying the violators, making him a driver of Texas’ Republican-driven push against Wall Street initiatives related to environmental, social and governance issues.

In December, HSBC said it will no longer finance new oil and gas fields or related infrastructure in a move that climate activists say puts it ahead of many peers in addressing global warming. At the time, the bank said it will continue to provide corporate finance and advisory services to energy sector clients.

HSBC doesn’t boycott the industry and “seeks a balanced approach in the implementation of its net zero commitment, with the primary aim being to support our customers in the transition from a high-carbon to a low-carbon economy,” Matt Ward, head of communications for HSBC USA, said in an emailed comment.

The bank will still make loans and provide capital markets support to energy-based customers that take an “active role” in the transition to cleaner fuels, which includes US-based energy companies, according to Ward. 

Hegar has cracked down on existing business relationships that the state’s investing arms have with companies on the list. In February, he sent letters to five Texas government-employee pension funds and an entity that manages money for public school systems, “strongly” encouraging them to sever all relationships with all the companies on his divestment list, according to copies of the communications seen by Bloomberg News.

(Updates with statement from Texas comptroller and HSBC.)

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