The Wyoming legislature has voted down two pieces of anti-ESG legislation that would have impacted the state’s ability to invest in a range of funds.
According to ESG Today, the two pieces of legislation would have restricted government entities from doing businesses with banks, investors or companies and would have eliminated the consideration of ESG criteria by investment managers investing state funds.
Firstly, the Stop ESG-Eliminate Economic Boycott Act would have required government entities to receive written assurance from firms prior to entering into contracts with them ensuring that the firms would not ‘engage in economic boycotts’ that involved taking any action against other companies for a range of reasons.
Secondly, the Stop ESG-State Funds Fiduciary Duty Act made clear the rules for investment managers for state funds, requiring hiring and retention only of managers that take into account “only financial factors,” which would effectively disallow the consideration of ESG factors, including emissions reduction or emissions disclosure.
The proposals were voted down by the Wyoming House of Representatives Appropriation Committee, which unanimously recommended not passing either bill.
Wyoming retirement system chief investment officer Sam Masoudi said, “One of our major concerns is that ESG is defined so broadly and subjectively…it’s defined so broadly here that if a company has a statement about being supportive of diversity for instance that might be enough to get them on the do not invest list.
“I think to your point brought up about Fortune 500 companies, everyone of them having something that might restrict us from investing, I agree with that. Earlier today, I was looking at the webpage of a very large coal company, and they have a page about their climate focus and how they are going to reduce emissions… theoretically we wouldn’t be able to invest in the coal company.”
Keep up with all the latest FinTech news here.
Governor of Florida Ron DeSantis has recently barred fund managers for state and local entities in the state from considering ESG factors in investment decisions.
Copyright © 2023 FinTech Global