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To: Interested Parties

From: Unlocking America’s Future

RE: Anti-Responsible Investing Legislation in South Carolina

Date: March 5, 2024

As attacks on responsible investing make their way through Congress and state legislatures across the country, Unlocking America’s Future is tracking some of the hotbeds for these policy debates. This week, we are turning our attention to South Carolina. 

Following passage of harmful anti-ESG legislation in the Palmetto State in 2023, two additional bills are currently pending in the state’s General Assembly that could further restrict using ESG criteria when investing state funds. 

Pending Legislation

House Bill 4699 

This legislation aims to restrict the state from offering incentives or subsidies to companies that “engage in the promotion of environmental, social, or governance (ESG) objectives.” Under this pending legislation, the Office of the State Treasurer would be tasked with developing regulations for enforcement. 

State Representative Josiah Magnuson introduced the partisan legislation in January and it was referred to the House Committee on Ways and Means. No hearing or vote has been scheduled on the bill. 

To date, 17 of 19 sponsors of the legislation are members of the South Carolina Freedom Caucus. Consumers Research, a national anti-ESG special interest group backed by greedy billionaires and self-serving judicial activist Leonard Leo, has helped fund the South Carolina Freedom Caucus. 

Senate Bill 1014

The legislation would make it more difficult for financial advisors to tell South Carolina retirees and business owners the true risks of the investments they’re making.

Bill sponsor Senator Josh Kimbrell says his bill will demonstrate that, “We oppose this social engineering agenda in our State!” Kimbrell introduced the legislation in February and it was referred to the Committee on Banking and Insurance with no hearing or vote yet scheduled. Sponsors of the bill have taken thousands in campaign cash and support from utility companies, and those with ties to utilities.

Previous Activity

ESG Pension Protection Act

In February 2024, Governor Henry McMaster signed H3690, the ESG Pension Protection Act, which prohibits the South Carolina Retirement System Investment Commission from making investment decisions based on environmental, social and corporate governance factors. The legislation passed the State Senate unanimously and in his signing statement McMaster said, “[the bill] will safeguard the interests of our retirees and taxpayers from the liberal ESG agenda.” 

These attacks on responsible investing hurt working Americans, resulting in billions of dollars of losses from pensions and harm to local economies. 

  • The Kansas State Division of the Budget projected reduced returns of $3.6 billion over 10 years for the Kansas Public Retirement System if anti-ESG investment restrictions were adopted. 
  • The Arkansas Public Employees Retirement System estimated that they could lose $30 million to $40 million per year due to an anti-ESG bill that would require the State Treasurer and public entities to divest assets from certain institutions that use ESG-related metrics. The Arkansas Teacher Retirement System estimated that the system could lose an additional $7 million or more per year as a result of the legislation. 
  • An analysis by the Wharton School of the University of Pennsylvania and the Federal Reserve Bank of Chicago found that Texas municipalities will be paying $300 million to $500 million in additional interest because of the state’s anti-ESG law – and that’s just on the $31.8 billion borrowed in the first eight months after the law went into effect.   
  • An analysis by the economics consulting firm ESI for the Sunrise Project found that taxpayers in six states — Kentucky, Florida, Louisiana, Oklahoma, West Virginia, and Missouri — could be on the hook for up to $700 million in excess interest payments if restrictions on sustainable investing are implemented. 

Attacks on responsible investing are unpopular among Americans across the political spectrum.

  • Poll after poll shows that Americans do not support attacks against responsible investing. 
  • Both Democrat and Republican state officials have denounced these attacks, citing the economic impact of legislation that would block sustainable investments. 
  • More than half of national likely voters (53%) support their state investing public retirement funds in assets related to clean energy.

Greedy CEOs and self-serving politicians are behind the attacks on responsible investing. 

  • Fossil fuel companies are “the major driver in the fight against sustainable finance,” according to documents obtained by InfluenceMap.  
  • Many of the politicians spearheading these attacks are simultaneously raking in tens of millions of dollars in contributions annually from oil and gas companies.   
  • Leonard Leo, the conservative kingpin known for remaking the judiciary, has spearheaded several initiatives and organizations to target responsible investing.