Treasurers and comptrollers from 13 states and New York City have publicly lambasted politicians who have pushed and adopted anti-ESG legislation.
Published on Wednesday, the statement is signed by New York City comptroller Brad Lander, California state treasurer Fiona Ma, Rhode Island general treasurer Seth Magaziner, Washington state treasurer Michael J Pellicciotti, and Oregon state treasurer Tobias Read among others.
The politicians are members of For the Long Term, a non-profit that aims to “help public Treasurers leverage the power of their offices to deliver sustainable long-term growth”.
Earlier this month, Responsible Investor revealed that the organisation had been tracking the various anti-ESG bills that have been passed over the past year, including the loopholes and caveats in them.
Dave Wallack, executive director of For the Long Term, told RI at the time that some treasurers were already communicating with banks and asset managers about state-level anti-ESG legislation and how they are responding. “Going forward we are going to be doing more of this as a group.”
He added that the network planned to contact firms contributing to the State Financial Officers Foundation (SFOF) – a conservative group involved in the anti-ESG movement – as well as states that are considering and/or have implemented anti-ESG bills.
Wednesday’s statement claimed: “Several states in our country have started blacklisting financial firms that don’t agree with their political views. West Virginia, Idaho, Oklahoma, Texas, and Florida have created new policies and laws that restrict who they will do business with, reducing competition and restricting access to many high quality managers. This strategy has real costs that ultimately impact their taxpayers.”
The signatories also accused the blacklisting states of ignoring “that climate change is real and is a true business threat to all of us”.
As a consequence of the legislation, they said, a divide is appearing between “states focused on short-term gains and states focused on long-term beneficial outcomes for all stakeholders”.
The statement warns that the short-term thinking being used by certain states imposes an “ideological screen” on an investment manager’s ability to perform or whether an investment banker can compete for the opportunity to underwrite debt. “This screen negatively impacts competitive costs, and increases potential risks that will be left for others to deal with in the future. In the case of state and public pension funds, these losses will be borne by the taxpayers and that means all of us.”
It added: “States that focus solely on the short term will fail to compete over the longer time horizon that is necessary for them and their pension funds to succeed. They will miss potential growth because their focus is on preserving the status quo. And they will suffer from possible suits or challenges that longer term players will avoid due to more rigorous oversight.”