Red states fight ‘woke’ banks pushing anti-fossil fuel policies

Republican states are battling efforts by some banks to push environmental, social and governance (ESG) standards that promote, among other progressive agendas, anti-fossil fuel policies.

Over the past year, at least 15 Republican-led states have proposed policies or laws that would punish banks for taking an anti-fossil fuel stance. According to FOX Business, state financial officers in Texas, Arkansas, Utah, Florida, Kentucky, North Dakota, Arizona, Idaho, Louisiana and South Carolina is taking or considering taking action against banks that boycott energy companies. Texas, Kentucky and Oklahoma already compile lists of banks with such policies.

A spokesperson for Kentucky State Treasurer Allison Ball in an interview with Fox Business pointed out that fossil fuel industries are “integral to the economy” of the state.

“They provide jobs for Kentuckians, power communities and the supply chain, and keep the lights on. We want to support these iconic industries,” the spokesperson said. “We hope we sent the message that if you don’t do business with Kentucky, we won’t do business with you.”

West Virginia recently announced it would block five financial institutions from entering into banking contracts with state agencies after those entities pushed policies against the fossil fuel industry. Institutions sanctioned include JP Morgan, Goldman Sachs and BlackRock.

The coal, natural gas, and petroleum industries are critical to West Virginia. In fiscal year 2022, for example, the state collected nearly $800 million through taxes from these industries, far more than the $300 collected in the previous fiscal year.

“We felt like we had a clear conflict of interest,” West Virginia Treasurer Riley Moore said at a June 8 news conference. “We produce coal, gas and oil, and this ESG movement in its current form is truly an existential threat to our jobs, our economy and our tax revenues.”

Countering ESG

Investment managers and banks that act against fossil fuel companies are applying economic sanctions, according to Utah State Treasurer Marlo Oaks.

“We need more capital for oil and gas production, and there are great opportunities to make money there. Why isn’t the money going there? Why don’t capital markets work like they used to? It’s because of ESG,” he said.

New policies adopted by Republican states against entities that act against fossil fuel interests will negatively impact the cash flow of these companies. For example, in 2021, Texas passed a law prohibiting doing business with companies that “boycott” energy companies.

As a result, Texas has pushed JP Morgan, Bank of America and Goldman Sachs out of the municipal bond market this year. JP Morgan had subscribed for $3.2 billion in Texas municipal bonds in 2021. So far this year, the bank has only subscribed for $210 million.

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Naveen Athrappully is a reporter and covers world affairs and events at The Epoch Times.

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