Today, the New Hampshire State House Committee on Executive Departments and Administration will debate legislation that makes it a felony punishable by up to 20 years in prison for knowingly using ESG criteria to determine investment strategies for state funds. This extreme bill goes far beyond other anti-ESG proposals in seeking to criminalize responsible investing.
In advance of the hearing, Unlocking America’s Future spokesperson Kyle Herrig said the following:
“Criminalizing activity that is good for the economy, good for business, and good for the environment is as outlandish as it is dangerous. Prohibiting state funds from using responsible investing criteria is shortsighted and will only hurt Granite Staters in the long run.” Herrig continued, “the extremist politicians pushing these kinds of laws only care about protecting the bottom line of wealthy special interests, not their own constituents. The truth is responsible investing works, and punishing those who want to make the best fiduciary decisions for the funds they manage will do far more harm than good.”
The proposed legislation has been widely reported on and criticized as punitive, short-sighted, and just plain “stupid.”
Bloomberg: New Hampshire GOP Officials Seek to Make Using ESG a Crime. Republican lawmakers in New Hampshire are seeking to make using ESG criteria in state funds a crime in the latest attack on the beleaguered investing strategy. Representatives led by Mike Belcher introduced a bill that would prohibit the state’s treasury, pension fund and executive branch from using investments that consider environmental, social and governance factors. “Knowingly” violating the law would be a felony punishable by not less than one year and no more than 20 years imprisonment, according to the proposal.
Pensions & Investments: It’s a felony: N.H. bill would make it a crime to knowingly use ESG criteria in investing taxpayer dollars. New Hampshire state legislators are seeking to expand their attack on ESG investing with two new proposals, including a bill that would make it a felony to “knowingly” invest state or taxpayer funds using ESG criteria that violates what legislators define as fiduciary duty. The two bills —one in the House of Representatives and the other in the State Senate —were introduced in early January. They haven’t been subject to committee hearings yet.
Opinion: Bloomberg (Matt Levine): Making ESG a Crime. Investors aren’t allowed to consider governance! Imagine if this was the law; imagine if it was a felony for an investment manager to consider governance “with any regard whatsoever.” […] I’m sorry, this is so stupid. “ESG” is essentially about considering certain risks to a company’s financial results: You might want to avoid investing in a company if its factories are going to be washed away by rising oceans, or if its main product is going to be regulated out of existence, or if its position on controversial social issues will cost it sales, or if its CEO controls the board and spends too much corporate money on wasteful personal projects.
Business Insider: Republicans in New Hampshire want to make ESG investment of state funds a crime punishable by up to 20 years in jail. A proposed bill in New Hampshire would prohibit environmental, social, and governance standards from guiding investment decisions using state funds, with violators subject to potentially lengthy jail time. The HB 1267 bill would make it a felony to consider ESG criteria when investing funds from the state treasury, retirement system, or executive branch agencies. Knowable violations would be punishable with imprisonment of between one and 20 years. Instead, investments should be based on maximizing financial returns and minimizing risks, the policy proposal outlined.
Responsible Investor: New Hampshire Republicans Propose Prison for ESG Investment. Lawmakers in the US state of New Hampshire have introduced a bill that would make investing state funds in line with ESG criteria a felony punishable by up to 20 years in prison. House Bill 1267-FN, introduced by three Republican lawmakers, would make “investing in state or taxpayer funds knowingly in a manner violating fiduciary duty concerning environmental, social, and governance (ESG) criteria” punishable by between one and 20 years imprisonment.
