ESG investing laws are a favorite tactic of the anti-ESG movement. Those laws generally require state pension funds and other state government investments to ignore ESG factors in investing and base their investments strictly on financial returns. Sometimes they go a step further and outline which firms and funds are barred. Recently, the Wyoming Secretary of State attempted to take things a step further – but the most extreme provisions of the proposal were line-item vetoed by the Governor. WyoFile discusses the proposed rule stating:
“The Wyoming State Loan and Investment Board — a group that includes both Gordon and Gray along with Wyoming’s three other statewide elected officials — approved a policy in August to require companies doing business with the state to disclose any ESG principles. Gray’s proposed rules took things further by requiring all investment brokers, broker-dealers and securities agents in Wyoming — not just those working with the state — to disclose ESG principles. Additionally, the rules proposed require customers to consent to ESG principles in writing every three years.”
While the Governor left some rules requiring the disclosure of ESG investment principles, he stopped short of allowing the more extreme measures. This is the second state measure shot down for going too far. We are seeing limits and lawmakers showing some restraint. This may be because, while ESG investing is of interest to many lawmakers, the public is generally unaware of ESG. Therefore, anti-ESG policies are less useful for mobilizing voters, and therefore politicians are less likely to use political capital to fight for extreme anti-ESG policy.
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