Oklahoma lawmakers are walking back their posterchild anti-ESG legislation, the Energy Discrimination Elimination Act (EDEA), after municipalities incurred an estimated $184.7 million in additional expenses in the first 17 months of implementation. The law, passed in 2022, placed some of the world’s largest financial institutions on a blacklist for contracts with state agencies and political subdivisions, including BlackRock, Wells Fargo, JPMorgan Chase, and Bank of America.
Oklahoma Deputy Treasurer Jordan Harvey claims state lawmakers were aware of these consequences, but less than two years later expansion efforts have failed and those same elected officials are backtracking.
- Previous efforts to expand the EDEA, including SB 469 which would require similar divestiture among the higher education sector, failed. HB 3541, which aimed to expand the law to cover agricultural, mining and timber industries, passed in the House but failed to advance in the Senate.
- In February 2024, lawmakers introduced SB 1510, which would limit the law to no longer apply to local governments and school districts, and later passed the Senate with an overwhelming majority in February and moved to the House.
- In March 2024, lawmakers introduced SB 1536, which would require the State Treasurer to seek an opinion from the Attorney General following a fiduciary or other dispute from a state agency regarding the EDEA – giving leeway on the law’s enforcement. The bill was later rejected in the House in April.
Adding insult to injury, Oklahoma lawmakers moved the EDEA forward despite deep research showing the financial impacts of these anti-ESG laws.
- 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 they could lose $30-40 million each year due to an anti-ESG bill requiring public divestiture from institutions using ESG-related metrics. The Arkansas Teacher Retirement System estimated an additional $7 million in losses each year as a result of the legislation.
- An economic analysis 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.
- A 2022 study found Texas’ anti-responsible investing laws would result in up to $500 million in undue interest over the first eight months of enforcement, costs which would ultimately be borne by taxpayers in the state.
