Another Arizona Republican-led effort to scale back the ESG movement in the state has been rejected by Democrat Governor Katie Hobbs.
On Monday, Senator Anthony Kern issued a press release, announcing that Governor Hobbs vetoed SB 1611, which he sponsored and which would have “countered the rapidly increasing use of environmental, social, or governance standards (ESG) scores to compel the business practices of private companies.”
In a statement, Kern expressed disappointment with the governor’s action, saying, “This bill would have ensured our state contracts do not push the goals of ESG in Arizona. If an organization supports ESG, we simply should not offer them a state contract. Tax dollars should not go to partisan organizations and organizations that implement politically driven policies. The Governor had the opportunity to put a stop to this clear form of discrimination, and instead, chose to support it.”
Senator Kern’s release elaborated on the purpose of his legislation and the importance of this proposal for the Grand Canyon State: “This bill specified a public entity may not implement an ESG policy as a condition of entering or renewing a contract with a company. ESG describes a set of standards imposed on companies to manipulate businesses and investors into compliance with Leftist political ideologies at the expense of free-market capitalism and investor returns. This system is similar to the concept of a credit score. If you don’t score high enough on their liberal meter, you could be rejected from doing business with these groups.”
Hobbs didn’t have much to say in her customary veto letter to Senate President Warren Petersen, writing, “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.”
After being introduced, SB 1611 was assigned to the Senate Government Committee, where it passed 4-3 – before clearing the full chamber 16-12 (with two members not voting). The legislation was transmitted to the House of Representatives and designated to the Government Committee, where it was approved with a 5-4 vote. The House then gave the green light for the bill 31-27 (with one member not voting and one seat vacant).
The governor’s veto of SB 1611 occurred on the same day she turned aside another, similar bill, which was SB 1500, sponsored by Senator Frank Carroll. That legislation would have “empowered (the) Arizona State Treasurer to eliminate ESG consideration from all state investments by requiring investments be made in the sole interest of the taxpayer.” Carroll pushed back in a statement this week, writing, “My interest is in protecting taxpayer dollars and protecting pensions. I sponsored this bill to get politics out of the pensions of public employees and public officials who have earned the right to financial stability after dedicating their lives to public service.”
Arizona Republicans and Democrats are unlikely to come together on the ESG issue as Hobbs has proven with her vetoes of bills from the legislature. Democrat Attorney General Kris Mayes has also taken her office in a different direction than that of her predecessor, stopping an ongoing investigation into the ESG movement soon after she took her post. Mayes said at the time, “The state of Arizona is not going to stand in the way of corporations’ efforts to move in the right direction.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Arizona Governor Katie Hobbs’ historic veto streak has uncovered another disappointed legislator.
On Monday, Republican Senator Frank Carroll issued a press release to highlight Governor Hobbs’ veto of his bill, SB 1500, “which would have empowered (the) Arizona State Treasurer to eliminate environmental, social, and governance (ESG) consideration from all state investments by requiring investments be made in the sole interest of the taxpayer.”
Hobbs justified her reasoning for the veto in a customary letter to the Arizona Senate President, writing, “Politicizing decisions best made by the state’s investment professionals can harm our state’s long-term fiscal health.”
Senator Carroll was unhappy with the governor’s action on his proposal, saying, “My interest is in protecting taxpayer dollars and protecting pensions. I sponsored this bill to get politics out of the pensions of public employees and public officials who have earned the right to financial stability after dedicating their lives to public service. By definition, pecuniary means, ‘relating to or consisting of money.’ That is the criteria by which taxpayer dollars should be invested, not a social system used to push political agendas.”
The lawmaker’s release further explained why SB 1500 would have been so important for Arizona, stating, “An investment evaluation, conducted by the State Treasurer, must be based on financial and economic factors, and not to promote nonpecuniary benefits, other nonpecuniary social goals or take unnecessary investment risks. This bill aimed to protect government employees who pay into a retirement fund, where that money is then invested by the State Treasurer. The growing practice of ESG policies being imposed on companies is cause for concern, as it deviates from typical investing and business practices to consider non-financial information about a company, and ultimately prioritizes liberal ideology and goals over investor returns.”
SB 1500 was first passed by the Senate on February 28 with a 16-14 vote after clearing the Government Committee earlier in the month 5-3. When the bill was transmitted to the House of Representatives, it first obtained approval from the Government Committee before receiving the green light from the full chamber with a 31-27 vote (one member not voting and one seat vacant).
Senators Ken Bennett, David Gowan, Sine Kerr, Janae Shamp; and Representatives Michael Carbone, Neal Carter, Tim Dunn, Teresa Martinez, Quang Nguyen, Austin Smith, and Justin Wilmeth co-sponsored the legislation.
Representatives from the Climate Cabinet Action, Sierra Club – Grand Canyon Chapter, and the Arizona Association of Counties expressed opposition to the bill as it made its way through the legislative process.
The governor’s veto continues an abrupt shift in state policy over the ESG issue, which has largely devolved into a Republican versus Democrat fight. Prior to 2023, Arizona had two statewide officials, who were extremely active in fighting back against the ESG movement with former Attorney General Mark Brnovich and Treasurer Kimberly Yee.
However, the transition of power in the Arizona Attorney General’s Office halted Brnovich’s investigative efforts into this movement. Kris Mayes, Arizona’s new top prosecutor, stopped an ongoing investigation from her predecessor, saying, “corporations increasingly realize that investing in sustainability is both good for our country, our environment, and public health and good for their bottom lines. The state of Arizona is not going to stand in the way of corporations’ efforts to move in the right direction.”
“Corporations increasingly realize that investing in sustainability is both good for our country, our environment, and public health and good for their bottom lines,” Mayes said in a statement. https://t.co/tfc75ZGlJZ
But State Treasurer Kimberly Yee continues to be an active opponent of ESG. Her office took several positions and actions against ESG during her first term, including revising the Arizona State Treasurer’s Office Investment Policy Statement to ensure that the Office “investments are not subject to the subjective political whims of the ESG standards.” Yee stated, “This is about maintaining American free-market principles that our country was founded upon and not allowing environmental or social goals to dictate how taxpayer monies are managed.”
Daniel Stefanski is a reporter for AZ Free News. You can send him news tips using this link.
Northern Arizona University (NAU) launched a climate change program geared toward a career focused on corporations’ Environmental, Social, Governance (ESG) scoring. The program spans four courses, each costing $500 — $2,000 total.
NAU announced the online, non-credit certificate program last week. The courses will prepare students for greenhouse gas (GHG) accounting. GHG is a key part of ESG.
“[This will] help working professionals gain the skills needed to address climate change at the corporate or organizational level,” stated the press release.
In the program, students will quantify the greenhouse gas emissions from individual products or commodities, business or corporation operations, and local communities. Then, the students will propose and defend emission management, reduction, and mitigation strategies.
NAU explained in its course description of the program that most large corporations were expanding GHG accounting hires at a rapidly multiplying pace.
“Companies see aggressive emission reduction goals as good for business and a way to market themselves as climate-friendly. However, companies cannot manage what they don’t measure. Therefore, the need for skilled GHG accountants is growing exponentially,” stated NAU.
The university also pointed out that the Securities and Exchange Commission (SEC) proposed a rule change in March requiring all publicly traded companies to report their climate-related finance risk.
The SEC rule would require companies to include these ESG findings in their registration statements and periodic reports. This would include governance and risk management processes of climate-related risks; the potential or current material impact of climate-related risks; the potential or current strategy, business model, and outlook impact of climate-related risks; and the impact of climate-related events on financials. It would also require disclosures of a GHG emissions target or goal, and GHG emissions from purchased electricity (or other energy forms) as well as upstream and downstream activities in its value chain.
SEC Chair Gary Gensler declared that mandatory ESG disclosure would better serve investors’ decision-making and hold corporations accountable.
“I believe the SEC has a role to play when there’s this level of demand for consistent and comparable information that may affect financial performance,” said Gensler.
The timing of this course is significant, given that state leaders such as Treasurer Kimberly Yee oppose ESG. In September, Yee modified the state’s investment rules to prevent ESG ratings from investment considerations.
NAU sustainability professor Deborah Huntzinger stated that environmental policymaking required quantifiable data that ESG approaches like GHG accounting offer. Huntzinger and NAU Online director of continuing education Brenda Sipe created the new GHG accounting program.
“To design effective policies, whether at the corporate or national level, to mitigate rising emissions and human-driven climate change, we need to accurately track emissions,” stated Huntzinger. “Robust training in the best practices in GHG accounting will lead to a more educated workforce that can better inform corporate, organizational, community and national discussions about effective climate change mitigation strategies.”
Along with Huntzinger, carbon analyst Heather Aaron will teach the courses.
The World Economic Forum (WEF), the globalist lobbying organization that serves as a pioneer for ESG scoring systems, identifies GHG accounting as a critical component of ESG. In a July publication, the WEF issued guidelines advising that GHG was key to quantifying the “carbon value” of corporations.
The WEF, along with numerous powerful corporations and advocates of progressive reforms like ESG such as George Soros, BlackRock, Vanguard, JP Morgan Chase, Amazon, General Motors, the Sierra Club, issued comments or engaged in meetings with the SEC in support of the ESG mandate (though many offered suggestions for improvement).
NAU will also offer its GHG program at the graduate level, requiring students to complete a minimum of 12 credit hours. The regular course commences on Jan. 30 and remains open for six months of access.
Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.
The world of finance is turning bullish on ESG, an investment strategy directing funds to corporations with woke environmental, social, and governance policies. Trillions of dollars have already flowed into ESG funds, projected to hit $50 trillion in two years.
ESG boosters claim the funds enable investors to do well by doing good. You can make good money while simultaneously bettering the world.
Wish it were so. In fact, ESG funds do neither.
Investing goals that compete with shareholder profitability have predictable results. A recent NYU study compared investment results created by firms with high versus low ESG scores, which are generated by professional ratings agencies. Over the past five years, high ESG funds have returned 6.3% compared with 8.9% for others. Over time, that’s a chunk of change.
Thus, Kentucky AG Daniel Cameron warned his state’s pension fund managers to avoid funds that “put ancillary interests before investment returns,” which would “violate statutory and contractual fiduciary duties” to the pensioners depending on them. Seniors deserve better than to have their retirements hijacked by an ideology they might not share.
The basic tenants of ESG are radical environmental policy (primarily the elimination of fossil fuels), woke social policies promoted by the company, and corporate governance that replaces merit with preferences based on race or gender.
The driving forces behind the growth of ESG are three very powerful financial firms. BlackRock, Vanguard, and State Street are, between them, the largest shareholders in 80% of the companies in the S&P 500. Their financial heft gives them the ability to force companies to implement ESG, making them, in effect, upstream controllers of these companies.
ESG is based on the foundational principle of progressivism—the notion that the most beneficial governance comes from giving experts, the best and the brightest, control over our lives. Personal freedoms and democratic processes must yield to a governing elite that knows best.
No goal is pursued more tenaciously than the elimination of carbon-based fuels. Consumers must be pushed into using renewables, principally by regulating fossil fuels into being scarce and expensive.
Green New Dealers may be thrilled to have the backing of the ESG behemoths, but the problem is that Europe is already experiencing a full-blown energy crisis, with America not far behind. For a year now, a post-COVID demand surge, combined with nuclear plant closures worldwide, long-standing over-investment in impractical renewables, and a global drop of over 50% in oil and gas investment since 2014, have combined to put serious pressure on economies worldwide.
Aluminum smelters, glass factories, and other EU manufacturers have had to shutter plants for lack of affordable energy. In the UK, the number of people behind on their energy bills ballooned from 3 million to 11 million earlier this year. Even in relatively secure Germany, there is deep concern over looming shortages of heating oil this winter after being shut off by Russia.
The hard fact is that, in our current state of technology, fossil fuels are the mainstay economic resource, whether we like it or not. We need more oil, natural gas, and nuclear energy, not less.
The hard-core environmental left, now joined by ESG interests, has worked itself into a lather insisting we can only avoid global catastrophe by achieving zero carbon emissions by 2050. Environmental alarmists achieve about the same accuracy with their predictions as the apocalyptic preachers of yesteryear. But even in the early stages of the project, it’s becoming obvious that it simply can’t be done.
Even if eliminating all emissions of carbon would significantly reduce atmospheric temperatures, and even if humans are the main villains of global warming, and even if we could somehow convince China and India to not sabotage the effort, it doesn’t matter. It’s neither economically nor politically possible to deprive humankind of the benefits of carbon fuels.
The financial titans pushing ESG are blowing an opportunity to do some real good. We need respected leaders who can stand up to the hysteria and exaggerations to propose practical, feasible solutions that would protect humanity from the worst effects of atmospheric warming.
Instead, the self-appointed experts are using other peoples’ trillions to push us down the road to dystopian government and perpetual poverty.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Six U.S.-based global banking firms which participate in Environmental, Social, and Governance (ESG) practices that seek to restrict investment in companies engaged in fossil fuel-related activities are under investigation by 19 states, it was announced this week.
Arizona Attorney General Mark Brnovich and 18 other state attorneys general served civil investigative demands against Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley, and Wells Fargo related to each company’s involvement with the United Nations’ Net-Zero Banking Alliance (NZBA). The demands act as legally enforceable subpoenas.
NZBA-member banks have promised to set emissions reduction targets in their lending and investment portfolios to reach net zero by 2050. It is one example of ESG practices which have come under scrutiny for prioritizing policy initiatives ahead of sound investment strategies.
In the case of the NZBA initiative, it could lead to some farmers, oil leasing companies, suppliers, and other businesses connected with fossil-fuel production being unable to get loans or find investors from the six banking firms and their affiliates, according to Brnovich’s office.
“American banks should never put political agendas ahead of the secure retirement of their clients,” Brnovich said in announcing Arizona’s involvement in the investigation. “These financial institutions are entrusted with protecting a different type of green.”
Arizona, Kentucky, Missouri, and Texas are the leadership states on the NZBA investigation. Some of the 10 interrogatories included in the civil investigative demands served on the six banking firms seek information on:
All divisions, groups, offices, or business segments whose responsibilities relate or used to relate to membership in the Net-Zero Banking Alliance or to ESG Integration Practices, and identify all executives, directors, officers, managers, supervisors, or other leaders of each division, group, office, or business segment;
Each Global Climate Initiative with which the firm is affiliated and an explanation of the reasons for choosing to join such Global Climate Initiatives;
Who made the decision to join each Initiative, including any involvement or input from the Board of Directors, investors, or Covered Companies;
All involvement in each Global Climate Initiative, including dates as well as “any promises, pledges, or other commitments” made by each company;
A detailed description of the company’s involvement with the Net-Zero Banking Alliance, including identities of all individuals who have represented the company within the NZBA.
In August, Brnovich joined Arizona in a 21-state coalition in commenting on a U.S. Securities and Exchange Commission (SEC) proposed rule that would add requirements for investment funds which consider ESG factors in their investment decisions. The proposed SEC rule was seen by the states as an attempt to transform the agency from a “federal regulator of securities into a regulator of social ills.”
The same month, Arizona was one of 19 states which sent a letter that put investment firm BlackRock on notice that its actions on a variety of governance objectives may violate multiple state laws by using “the hard-earned money of our states’ citizens to circumvent the best possible return on investment.”
BlackRock, which oversees some pension funds in those states, has been engaging in a “quixotic climate agenda” that appeared to be sacrificing pensioners’ retirements instead of focusing solely on financial return.
“Fiduciary duty is not lip service. BlackRock has an obligation to act in the sole financial interest of its clients,” the Aug. 4 letter stated. “Given our responsibilities to the citizens of our states, we must seek clarification on BlackRock’s actions that appear to have been motivated by interests other than maximizing financial return.”
And in November 2021, Brnovich announced a review of Climate Action 100+ and its investment company members which manage trillions of dollars in assets. This was prompted by concerns that the firms will put their ESG goals ahead of well-established fiduciary duties.
This could include inappropriate pressure and anticompetitive conduct against the members’ own clients and customers who do not comply with the ESG practices of Climate Action 100+, according to the attorney general’s office.
