Indeed, in statehouses across the country, GOP lawmakers are promoting bills to punish companies that divest from fossil fuels or otherwise consider climate change in their business decisions. The raft of legislation is thrusting corporate climate action into the nation’s broader culture wars over reproductive rights, critical race theory and other contentious issues.
Like many conservative causes, the trend started in Texas, where Gov. Greg Abbott (R) last year signed legislation requiring the state’s retirement and investment funds to divest from businesses that cut ties with or “boycott” fossil fuel companies.
“Elon Musk is right: ESG is a scam,” the Texas Public Policy Foundation, a conservative group that backed the measure, said in a video posted to Twitter last week. “What’s an ESG score? It determines how compliant a business is with the woke mob’s agenda.”
Conservative lawmakers in 15 other states have introduced similar legislation, the New York Times reported. Here’s what to know about proposals in two red states — and what they could mean for business leaders concerned about the financial risks posed by climate change:
Earlier this month, Oklahoma Gov. Kevin Stitt (R) signed into law the Energy Discrimination Elimination Act, which requires the state to stop doing business with financial firms that are “discriminating” against fossil fuel companies. The measure tasks the state treasurer with creating a list of such firms.
“Oil and gas has been the main driver of the economy and the state of Oklahoma for the last 100 years,” state Sen. Mike Allen (R), who sponsored the bill, said in an interview with The Climate 202. “And so I don’t want to do business with people that are trying to put us out of business.”
When asked about climate change, Allen said he broadly agrees with the views of Sen. James M. Inhofe (R-Okla.), who notoriously brought a snowball onto the Senate floor in 2015 to illustrate his belief that global warming is a hoax.
The American Legislative Exchange Council, an organization that works with conservative state lawmakers, considered a draft model policy last year that resembles Allen’s bill and has the same title. However, Allen said he had not consulted with the council about the measure.
Joe Trotter, the council’s task force director for energy, environment and agriculture, told The Climate 202 that it’s not yet clear whether a similar draft policy will be considered at the organization’s July meeting in Atlanta.
In Louisiana, state Rep. Danny McCormick (R) has sponsored House Bill 25, which would prohibit the state’s retirement systems from investing in companies that have policies against doing business with fossil fuel firms.
In an interview with The Climate 202, McCormick said he was so impressed with the Texas bill that he asked lawyers in the Louisiana legislature to “mimic” that measure. He also expressed skepticism of the scientific consensus that climate change will have — and is already having — catastrophic effects around the globe.
“I don’t know if we’ve proved that man-made climate change is significant enough to be concerned about at this time,” McCormick said. “Prosperity is tied to affordable energy. And if we make energy unaffordable, it’s going to impoverish so many people.”
After the bill was introduced in January, members of the House Retirement Committee expressed concerns that it “may be tying the retirement system’s hands when it comes to future investing,” McCormick said. The bill is now “basically dormant for this session,” he said, adding that he hopes to reintroduce it in a future legislative session.
Ivan Frishberg, chief sustainability officer at Amalgamated Bank, which doesn’t do business with fossil fuel companies, told The Climate 202 that ESG investing has “always been a little bit of a political football when it comes to fiduciary rules.” He noted that Presidents George W. Bush and Barack Obama both issued guidance on the matter, while President Donald Trump‘s Labor Department issued rules making it harder for retirement plan managers to consider ESG factors when investing on their clients’ behalf.