Oklahoma’s Anti-ESG Law Is Not Hurting Sooner State Taxpayers or Retirees.
By Paul Tice
Over the past three years, Oklahoma and 18 other Republican-controlled states passed legislation banning financial firms that pursue an environmental, social and governance (ESG) agenda from engaging in state financial business. Many of these states are, like Oklahoma, dependent on the oil and gas business for their economic and financial well-being. These anti-ESG laws are mainly defensive moves aimed at protecting the in-state energy industry from the existential funding threat posed by the climate-driven sustainable finance movement.
The ESG empire is now striking back with lawsuits challenging many of these laws on both fiscal and fiduciary grounds. Progressive ESG activists are arguing with a straight face that these laws are hurting taxpayers and retirees and wasting government money by raising the cost of public finance and public pension fund management, with ironic appeals to free-market capitalism, constitutionality and apoliticism thrown in for good measure.
Oklahoma now stands on the front line of this anti-anti-ESG legal fight. In 2022, the Sooner State passed House Bill 2034, the Energy Discrimination Elimination Act (EDEA), which prevents state and local agencies from doing business with financial institutions that boycott traditional energy companies. Under the EDEA, State Treasurer Todd Russ is required to maintain a running list of banned financial institutions engaging in energy discrimination, which the law defines as “without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with a company” active in the fossil fuel chain. Notably, any financial institution can avoid being blacklisted by simply attesting in writing to the fact that it does not boycott energy companies, which would seem like a very low bar.
Read the full Real Clear Energy article.
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Paul Tice is an Adjunct Professor of Finance at NYU Stern.