NEW YORK, April 8 (Reuters) - West Virginia has added

Citi, HSBC ( HSBC ) and two other financial firms to a

list of institutions that may be barred from some state business

due to their energy finance policies, prompting three of them to

assert their commitment to that industry.

The move was the latest flare-up in a bubbling dispute

between Republican officials and Wall Street firms over use of

environmental, social and governance (ESG) factors in banking

and business.

West Virginia, a major energy-producing state, created the

list in 2002, placing five firms on it at the time.

On Monday, West Virginia Treasurer Riley Moore also added TD

Bank and the Northern Trust Co to the list.

Moore's office says the list is for firms that "have

publicly stated they will refuse, terminate or limit doing

business with coal, oil or natural gas companies without a

reasonable business purpose".

Citi said it was disappointed by the designation.

"Citi is not engaged in a boycott of energy companies as

evidenced by the fact that we continue to lend to these

companies and have substantial credit exposure to the industry,"

it said in a statement.

A Northern Trust ( NTRS ) spokesperson said the asset and wealth

manager "does not restrict or prohibit investment in fossil

fuel-based energy companies." The spokesperson said Northern

Trust ( NTRS ) had around $52 billion in investment exposure to companies

in the traditional energy sector as of February 2024.

HSBC ( HSBC ) seeks "to work with - not boycott - energy companies,"

a U.S.-based spokesperson said via email. The bank expects to

continue corporate lending and capital markets transaction

support to "energy-based customers," the spokesperson continued.

TD Bank did not respond to a request for comment.

Financial firms also face pressure from the other side of

the ESG debate, with environmental activists and investors

pushing them to stop financing new projects in areas like oil

and gas.