To: Interested Parties
From: Unlocking America’s Future
RE: Governors for and against responsible investing
Date: February 23, 2024
This week, governors and their staff are gathering for the National Governors Association’s 2024 Winter Meeting in Washington D.C. to discuss the nation’s most pressing policy issues. The convening comes off the heels of several unprecedented attacks against responsible investing, including Exxon filing a lawsuit against its own shareholders, a coalition of big business groups including the U.S. Chamber of Commerce suing California, and New Hampshire introducing legislation that would criminalize using ESG criteria in public contracts.
This memo provides information on some of the top governors standing up for responsible investing, as well as some of the most outspoken opponents.
Bans on responsible investing are broadly unpopular across party lines. Govs. Katie Hobbs (AZ), Roy Cooper (NC), J.B. Pritzker (IL), and Gavin Newsom (CA) are champions of responsible investing and are ensuring companies can engage in the practice without interference from greedy billionaires and special interests.
- Gov. Katie Hobbs has vetoed five anti-responsible investing bills, including legislation to establish limits on public sector investments and a ban on social credit scores. Following her veto of the bill in June 2023, Gov. Hobbs made clear that wealthy billionaires and special interest groups will not influence her role, stating “I do not believe that tying the hands of the state’s procurement and investment professionals is in the best interests of the people of Arizona.”
- Gov. Roy Cooper stood up to the North Carolina legislature in 2023 and vetoed a ban on responsible investing. While the veto was later overridden, Gov. Cooper called out the legislation’s backwards architecture, writing that the bill “does exactly what it claims to stop.” Gov. Cooper went on to write in his veto message, “For political reasons only, it unnecessarily limits the Treasurer’s ability to make decisions based on the best interest of state retirees and the fiscal health of the retirement fund.”
- Gov. J.B. Pritzker signed the Illinois Sustainable Investing Act in 2019 to promote responsible investing, inking into law responsible investing’s value for the economy, climate, and everyday Americans. In June 2023, Gov. Pritzker signed HB2782, establishing a protocol for investment managers working with public pensions in Illinois to disclose how they integrate factors such as greenhouse gas emissions into their decisions.
- Gov. Gavin Newsom signed two first in the nation bills in 2023 requiring disclosure of climate risk and greenhouse gas emissions by large companies that operate in California. They are the U.S.’s most ambitious climate disclosure measures and push America into a competitive posture on the global stage, with several other nations already having implemented similar or more ambitious measures.
Top opponents of responsible investing include Govs. Greg Abbott (TX), Ron Desantis (FL), Jeff Landry (LA), and Governor Kevin Stitt (OK). These opponents have all received significant funding from self-interested corporate and special interest groups that oppose responsible investing.
- Gov. Greg Abbott has taken at least $52 million in career contributions from the oil and gas industry and has repeatedly attacked companies engaging in responsible investing. Gov. Abbott’s most severe and recent effort included passing legislation that bans public contracts with companies maintaining ESG policies. An analysis by the University of Pennsylvania Wharton School and the Federal Reserve Bank of Chicago found that taxpayers in the state will be on the hook for $400 million in additional interest because of the law.
- Gov. Ron Desantis has taken at least $2.1 million in campaign cash from the oil and gas industry and has described corporations as the “woke mob” and falsely blamed high insurance costs on ESG policies. In 2023 Gov. Desantis signed a sweeping law that banned state officials from investing public money to promote responsible investing goals and prevents ESG bond sales. DeSantis also made attacks on ESG, the cornerstone of his failed presidential bid.
- Gov. Jeff Landry has received at least $1.3 million in campaign donations from the oil and gas industry and has used his political power to push their anti-responsible investing rhetoric, signing letters as then-State Attorney General to the SEC that accused the Commission of “destroying industries central to the American economy.”
- Gov. Kevin Stitt has taken more than $720,000 in campaign contributions from the oil and gas industry and signed a boycott bill in 2022 that punishes firms for ‘discriminating’ against fossil fuels. Gov. Stitt has doubled down on his attacks against responsible investing, appearing on cable TV to accuse responsible investing as ‘anti-American.’
Research has consistently shown that attacks on responsible investing endanger the financial well-being of everyday Americans, especially in the form of higher taxes and lower returns on retirement savings. Beyond being a financial loser, attacking responsible investing is a political loser. The latest polling data shows Americans overwhelmingly and across party lines oppose bans on responsible investing and worry that supporters of these bans “do not care about the well-being of the middle class or American workers.” It is critical that champions of responsible investing, especially at the gubernatorial levels of government, stand up against these attacks, which risk the economy, our climate, and Americans’ well-being.
