The governors of Utah, Kentucky, West Virginia, Arkansas, Montana, and Florida have so far in 2023 signed legislation into law aimed at combating environmental, social, and governance policies.
More than a dozen states have introduced or are considering taking action on similar bills, including Kansas.
“Over the last few years, misguided ESG policies in investments have left fiduciary responsibility behind, forcing money into funds that line up politically with the ideology of activist investors,” Kansas House Majority Leader Chris Croft, a Republican, told The Daily Signal in an emailed statement. “Implementation of these policies go against free market principles, and it’s not what is best for Kansans.”
“Our goal this year was to reassure our constituents that Kansas won’t let anyone play politics with taxpayer dollars or state contracts and ensure that fiduciary responsibility takes precedence over ideological credit scores,” Croft said. “I am proud to stand with many Kansas legislators, passing legislation that puts our taxpayers and retirees first by making certain that state funds are managed to prioritize the highest return on investment.”
Republican Utah Gov. Spencer Cox signed two bills into law on March 14.
SB 96 “addresses fiduciary duties for funds managed by public entities.”
The bill, sponsored by state Sen. Chris Wilson, a Republican, in the Senate and state Rep. Susan Pulsipher, another Republican, in the House, also “requires a public entity to invest public funds in accordance with the prudent investor rule; addresses a public entity’s proxy voting duties; requires a public entity to provide the state treasurer access to proxy voting reports upon requests; and makes technical and conforming changes.”
The law will take effect on May 3.
SB 97 relates to economic boycotts and “addresses public entity contract requirements.”
The bill specifically “defines terms; subject to exceptions, prohibits a public entity from entering into a contract with a company that engages in certain boycott actions,” and “prohibits a person from penalizing a company that agrees not to engage in certain boycott actions while under contract with a public entity.”
The bill also “provides that a person who penalizes a company for agreeing not to engage in certain boycott actions while under contract with a public entity interferes with the state’s interest in administering state programs and maintaining commercial relationships” as well as “makes technical and conforming changes.”
Wilson was the bill’s chief sponsor while its House sponsor was state Rep. Rex Shipp, a Republican. The law also takes effect on May 3.
Republican Kentucky Gov. Andy Beshear signed HB 236 into law on March 24.
“Kentucky now has the strongest anti-ESG legislation in the nation. For many years, pension investments were about maximizing returns,” Kentucky State Treasurer Allison Ball, a Republican, told The Daily Signal in an emailed statement. “Recently, however, there has been a destructive shift in investment methodology to use the savings of Americans as financial muscle to push ideological causes through the ESG movement.”
“Kentucky has said no to this shift by passing HB 236, which clarifies that pension fiduciaries must base investment decisions solely on financial metrics, not politics,” Ball said.
Republican state Reps. Scott Sharp, Shane Baker, Daniel Elliott, Patrick Flannery, Steve Rawlings, Walker Thomas, and Wade Williams sponsored the legislation.
Republican West Virginia Gov. Jim Justice signed HB 2862 into law on March 28.
“The purpose of this bill is to ensure that all shareholder votes by or on behalf of the West Virginia Investment Management Board and the Board of Treasury Investments are cast according to the pecuniary interests of investment beneficiaries,” a summary of the bill says.
Republican delegates Dean Jeffries, Eric Householder, John Hardy, Evan Worrell, Chris Phillips, Walter Hall, Riley Keaton, Laura Kimble, and Marty Gearheart sponsored the legislation.
Republican Arkansas Gov. Sarah Huckabee Sanders signed HB 1307, which is “concerning the regulation of environmental, social justice, or governance scores; and to authorize the treasurer of state to divest certain investments or obligations due to certain factors,” into law on March 30.
Republican Montana Gov. Greg Gianforte signed HB 228, which is “an act revising public investments by prohibiting the consideration of nonpecuniary factors; providing definitions; providing enforcement by the attorney general; and providing an immediate effective date,” into law on April 19.
Republican Florida Gov. Ron DeSantis signed HB 3, “an act relating to government and corporate activism,” into law on May 2.
“In Florida and across the nation, we’ve heard from law-abiding small business owners and consumers who’ve been denied access to financial services because of where they work or what they believe in,” DeSantis said in a statement. “Through this legislation, Florida will continue to lead the nation against big banks and corporate activists who’ve colluded to inject woke ideology into the global marketplace, regardless of the financial interests of beneficiaries.”
“With the enactment of HB 3, Florida joins several other states pushing back on the ESG agenda – protecting citizens from arbitrary ESG standards being imposed through financial institutions and woke corporations,” Andrew Olivastro, Heritage’s vice president of outreach, told The Daily Signal in a statement. “States are fighting back, like Florida, and these bills are sweeping the nation.”
Other states that have introduced or are considering similar bills include South Carolina, Iowa, Oklahoma, Indiana, Texas, Tennessee, Ohio, Missouri, Arizona, and Alabama.
“ESG policies push the Left’s progressive agenda on the American people through businesses and corporations, disregarding American values and giving beneficiaries fewer financial returns in the process,” Jessica Anderson, executive director of Heritage Action for America, the grassroots arm of The Heritage Foundation, told The Daily Signal in an emailed statement. (The Daily Signal is the news outlet of The Heritage Foundation.)
“States all across the country are joining Utah, West Virginia, and Kentucky to pass and enact legislation clarifying fiduciary duty, combating the threat of the ESG movement on American livelihoods, and stopping woke fiduciaries from using public retirement and investment funds as political pawns.”
“Last week, the Kansas Legislature notably passed HB 2100, legislation clarifying that fiduciaries must only consider financial factors when making investments, ensuring that Kansans’ savings are being invested in companies that fit their values,” Anderson said.
Anderson added:
Other states across the country—like Florida, Oklahoma, Ohio, and Tennessee—are adding to Kansas’s momentum as they push to protect jobs and investments from the Left’s extreme political agenda, putting Americans’ money back into their hands.
Heritage Action grassroots are proud to stand behind these lawmakers as they lead the fight against ESG.
This article may be updated should more states take action against ESG policies.
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