Despite Governor Katie Hobbs’ prior vetoes of harmful anti-ESG (responsible investing) legislation, Arizona’s Republican-controlled legislature continues to advance bills that would restrict responsible investing practices that benefit Arizona’s economy, businesses, and families.
Here’s what you need to know about how these bills would limit investment options, potentially raising costs for taxpayers and hindering economic growth across the state:
Why Responsible Investing Matters for Arizona’s Economy:
- Lower Costs for Families: Responsible investments often prioritize long-term sustainability that reduces costs over time, from energy-efficient infrastructure to climate-resilient development.
- Increased Competitiveness: Many companies headquartered or operating in Arizona already incorporate responsible investing factors to remain competitive globally and attract investment capital.
- Job Creation: The transition to sustainable technologies creates new, high-paying jobs in renewable energy, water conservation, and other future-focused industries critical to Arizona’s growth.
- Risk Management: Considering environmental and social factors helps investors avoid costly risks, protecting retirement savings for public employees and state investments.
How Anti-ESG Bills Would Harm Arizona’s Economy
These bills represent political interference in sound business and investment practices. By targeting responsible investing in Arizona they would:
- Force investment managers to ignore long-term financial risks
- Potentially reduce returns on state pension funds
- Create regulatory confusion for Arizona businesses
- Limit access to capital for companies addressing climate challenges
- Disadvantage Arizona in competing for future-focused industries and jobs
Responsible investing isn’t about politics—it’s about smart economics. By considering all factors that affect long-term value, responsible investing approaches help create sustainable growth, good-paying jobs, and a more resilient Arizona economy.
What Current Anti-ESG Bills Threaten Arizona’s Economic Future
- Senate Bill 1093 – The misleadingly named “Government Investments Protection Act”:
- What it does: Forces state investment managers to ignore critical risk factors that impact long-term financial performance, potentially lowering returns for taxpayers.
- Economic impact: Could reduce returns on state pension funds and investments by artificially limiting investment strategies and forcing suboptimal decision-making.
- Status: Passed Senate (17-12, 1 NV); Transmitted to House on 2/20/25.
- Senate Bill 1094 – Financial institutions “discrimination” bill:
- What it does: Prevents financial institutions from accurately assessing risk using standard industry practices that incorporate environmental and social impact.
- Economic impact: Could raise borrowing costs for Arizona businesses and families by forcing lenders to ignore legitimate risk factors.
- Status: Passed Senate (17-12, 1 NV); Transmitted to House on 2/20/25.
Gov. Hobbs’ Track Record Protecting Arizona’s Economic Interests
Arizona has become a battleground for anti-ESG legislation, with 12 bills introduced last year and four filed in the current session. Fortunately, Governor Hobbs has consistently protected Arizona’s economic interests—including voting the following pieces of legislation:
- Senate Bill 1500 (2023), which would have prevented the State Treasurer from exercising shareholder voting rights to support responsible corporate governance. In her veto letter, Hobbs wrote: “Politicizing decisions made by the state’s investment professionals can harm our state’s long-term fiscal health.”
- Senate Bill 1611 (2023), which would have prohibited government agencies from considering ESG factors in contracting. Hobbs explained: “Tying the hands of the state’s procurement and investment professionals is not in the best interests of the people of Arizona.”
- House Bill 2472 (2023), noting the bill relied on undefined concepts that “[don’t] exist anywhere in the United States,” creating regulatory confusion rather than clarity.
