Blue State Officials Rally Around Green Investing Against GOP Pressure Campaign
DDemocratic officials and green finance advocates are mobilizing around environmental, social and governance investments to rebuke Republican officials who want to punish “woke” companies for their ESG-focused fund management strategies.
Red state financial officers have resisted ESG over the past year, implementing new laws and policies to cut the state’s ties with fund managers who have been keen to invest more in green assets and less in traditional energy. Their Democratic counterparts are now accusing these states of obstructing a free market and maintaining the “status quo” by seeking to punish ESG, which is an approach to investing that aims to serve a “transition” at the scale of the economy away from fossil fuels.
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There will be “two types of states moving forward,” 14 Democratic state finance officials wrote in an open letter published Wednesday: “States are focused on short-term gains and states are focused on long-term beneficial results for all stakeholders”.
Democratic officials, who serve states from Maine to Oregon, said West Virginia, Texas and other red states that blacklist financial firms on the ESG, in some cases banning government investment in these companies, impede the free market and harm taxpayers.
“States that focus only on the short term will fail to compete over the longer time horizon that is necessary for them and their pension funds to succeed,” the officials wrote. “They’ll miss out on potential growth because they’re focused on preserving the status quo. And they’ll suffer from potential lawsuits or challenges that longer-term players will avoid due to tighter oversight.”
In August, Texas Comptroller Glenn Hegar, in accordance with a new law that took effect in September 2021, released a list of 10 financial companies considered to be engaged in a “boycott” of traditional energy companies. The list included European companies such as Credit Suisse and Schroders, as well as US firm BlackRock, the world’s largest fund manager.
By law, government entities, including the Texas Employees Retirement System, the Texas Teachers Retirement System, and the Texas Municipal Retirement System, are subject to investment prohibitions and requirements. divestment related to blacklisted companies.
Hegar said some of the blacklisted companies “could use primarily Texas-owned investments to directly push shareholder initiatives that run counter to the interests of our state.” Texas is by far the nation’s top oil producer, as well as the top producer of natural gas.
Riley Moore, the Republican state treasurer of West Virginia, who also implemented legislation restricting the natural gas and coal producer’s financial dealings with ESG-related companies, dismissed officials’ criticism democrats.
“West Virginia and our allies are using our power as market participants to ensure the free market remains free and our people do not suffer to advance anti-American globalist agendas,” he said in a statement. response to the open letter.
The financial companies targeted by Hegar, Moore and others have accused Republican officials of misrepresentation, and indeed the investment chart of at least some of these companies, including BlackRock, is not easily dismissed as combustible. anti-fossil. The company was part of a $15.5 billion deal finalized in December to fund gas pipelines in Saudi Arabia.
Chairman and CEO Larry Fink said at the time that “responsibly managed natural gas infrastructure has a significant role to play in this [energy] transition.”
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Mindy Lubber, who heads the nonprofit sustainability group Ceres, said Texas and other states have glossed over instances of continued funding for such projects by the targeted companies.
They turn a “simple economic matter” in climate risk management into “political football”, she said.
“We’re not playing with Legos. We’re playing with our children’s lives and we’re playing with the economy,” Lubber said. “If something has a financial impact, it has to be factored into how decisions in financial markets are made.”