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Oklahoma legislative study claims law opposing ESG helps state economy (2023)
| Environmental, social, and corporate governance |
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| • What is ESG? • Enacted ESG legislation • Arguments for and against ESG • Opposition to ESG • Federal ESG rules • ESG legislation tracker • Economy and Society: Ballotpedia's weekly ESG newsletter |
Oklahoma lawmakers were recently told in a legislative study that their efforts to push back against ESG have helped the state’s fossil-fuel-heavy economy:
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A state law that prohibits Oklahoma government entities from using investment firms that boycott energy companies is having a small but positive impact on Oklahoma’s economy, lawmakers were told at a legislative study. “It is having an effect,” said Corporation Commissioner Kim David, who supported the law when she was a state senator. “It’s having a positive effect for Oklahoma.” She said global investment companies continue to stick to their “Environmental Social Governance” (ESG) policies, but that “the banking community as a whole” is starting to become more welcoming to oil-and-gas companies. The rising price of oil and rising interest rates are also playing a role in that trend, she said. House Bill 2034, which created the “Energy Discrimination Elimination Act of 2022,” required the office of the state treasurer to conduct a review of investment firms to identify those that boycott investments in oil-and-gas companies regardless of the impact on investment returns. State entities cannot contract with firms on that list. … A number of studies have shown that ESG investing policies have worse rates of return than what occurs when companies focus on growth potential. For example, a study by UCLA and New York University found that over five years ESG funds underperformed the broader market. Additionally, in comparison to other investment plans, ESG investors generally end up paying higher costs for worse performance. … When HB 2034 was being debated, David said there were an estimated 1,192 institutions that held $14 trillion in assets worldwide that were divesting from fossil fuels. She noted oil and gas account for roughly 27% of the Oklahoma economy. State Treasurer Todd Russ said the law has caused some major financial firms to change their rhetoric when seeking contracts from Oklahoma government entities, but that rhetoric is often undercut by those firms’ actions. “To all of these financial people that come to see me, my statement became, ‘Don’t tell me. Show me. Because when I go look at your website, what you’re telling me is very different from what your history and from what your public statements—publicly facing statements—are actually saying,’” Russ said. “And they couldn’t argue that. It was really like they just kind of got caught red-handed.” … Several officials at the study noted the environmental goals touted by ESG proponents have little basis in reality.[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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