Energy producing states leads war on ESG

 Washington Examiner:

West Virginia’s treasurer sees his state’s successful effort to cut off financial institutions that “boycott” fossil fuel companies as a prelude to a broader push against what is known as the environmental, social, and governance, or ESG, movement.

West Virginia made waves last month when it deemed five financial institutions ineligible for state banking contracts on the grounds that they “boycott” fossil fuel companies. The shift away from fossil fuels is part of the larger corporate move toward the prioritization of ESG goals.

The restricted financial institution list included BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo — some of the biggest financial firms in the world. The determination was made by West Virginia Treasurer Riley Moore’s (R) office after the state legislature empowered him to do so. After successfully cutting off the firms and seeing some early signs that the pressure campaign may be yielding results, Moore is looking to expand the effort.

The pressure was enough to change course for one firm, U.S. Bancorp, according to Moore. He said U.S. Bank changed its no-lending policy to the fossil fuel industry so that it was removed from the list.

“Which is a huge win,” Moore said.

Moore said he heard from the firms that were ultimately blacklisted in writing and had meetings with officials from some of the groups. He said that despite the meetings, the five were not removed from the list because they still maintained policies that were “boycotting the fossil fuel industry.”

“And for us, we had this conflict of interest where we can’t hand our tax dollars that are, a good amount, generated from the fossil fuel industry to financial institutions that are trying to diminish those funds at the exact same time through their policies, so in short, we’re not going to pay for our own destruction,” Moore said.

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It is yet to be seen just how much the pressure campaign will result in firms changing their policies, though the effort isn’t just being pursued by the Mountain State. The governors of Kentucky, Oklahoma, and Tennessee have all signed similar legislation in recent weeks that put forward plans for divesting from firms that boycott the fossil fuel industry.

Tennessee passed legislation that blocks the state from dealing with banks or financial institutions that refuse to work with fossil fuel companies

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Texas has also been at the forefront of the fight against ESG. Dozens of financial firms under pressure from Texas to avoid divesting from the fossil fuel industry have told the state that they don’t boycott the industry.

The reassurances came after Texas Comptroller Glenn Hegar’s office asked several firms about their policies on environmental standards given the corporate push to move toward renewable energy. He also asked the companies for a list of any mutual funds or exchange-traded funds in their portfolios that prohibit or limit investment in fossil fuels.

Moore said he and the other state treasurers in red states pushing back on ESG initiatives from financial firms have been in close contact about the effort with hopes of making the pressure campaign effective. He said it has been a “concerted” and “coordinated effort” and is encouraging other states to join the group and pass similar legislation.

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I suspect the Biden administration and the anti-energy left have been behind the ESG movement which has made it more difficult for energy producers to get loans for exploration and production. That in turn has been a factor in reducing the supply of energy and driving up the cost to consumers.