Deep red state proposal triggers anti-ESG policy debate
Oklahoma’s State Treasurer Todd Russ is raising concerns about Senate Bill 714, which he says could potentially open the door further for the controversial practice of “environmental, social, and governance” (ESG) in the deep red state. The bill aims to amend the Energy Discrimination Elimination Act of 2022, stripping the treasurer’s “enforcement authority” and transferring it to the state Attorney General’s office.
Under the current law, the treasurer maintains a list of banks that are prohibited from doing business with the state government if they have publicly expressed opposition to oil and gas companies. However, critics argue that the wording in the new legislation would lower the standards required for an institution to be placed on the list and how agencies enforce it.
“The bill actually removes the treasurer from oversight of the investment behaviors of big financial institutions and proposes to put it under the attorney general’s office,” Russ explained. “So, I mean, that alone raises a lot of questions. As a constitutional officer in the state treasurer in Oklahoma, why would you want someone that doesn’t have the constitutional commitment and obligation to oversee the financial investments and affairs of the state to be under the treasury and move it to a different constitutional office?”
The 2022 state law is currently facing legal challenges, making its fate uncertain. The law is designed to prevent the state from supporting institutions that are perceived as detrimental to the energy industry. Russ emphasized that the state’s investments should focus solely on financial performance and profits, rather than being used for political leverage.
The list compiled by Russ has resulted from inquiries about energy investment practices to various banks and prohibits those on the list from participating in key state investments such as pension funds. Oklahoma Attorney General Gentner Drummond’s office criticized the treasurer’s handling of the Energy Discrimination Act of 2022, stating that the bill is necessary due to the treasurer’s failure to defend the act successfully.
Republican state Sen. Dave Rader, the sponsor of the bill, plans to propose amendments to clarify the definition of a boycott energy company, add legislative intent to protect retirement systems, and eliminate certain provisions that could hinder divestment efforts. However, these amendments have not yet been made official on the Oklahoma State Legislature’s website.
The legislation must pass a full Senate vote by March 27 before potentially advancing to the state House of Representatives for further consideration. The ongoing debate surrounding ESG practices in Oklahoma highlights the intersection of politics, finance, and energy interests in the state.
