Oklahoma, like several other conservative-leaning state governments, currently has anti-ESG investing laws on the books. The law bans public retirement funds and state agencies from doing business with financial services firms that are deemed to be “boycotting” fossil fuels. Just who qualifies as “boycotting” fossil fuels under the ban is decided by the State Treasurer who has identified seven firms, BlackRock, State Street, Wells Fargo, JPMorgan, Bank of America, Climate First Bank, and Barclays. However, a recent lawsuit succeeded in scoring an injunction at the trial court level, preventing the law from being enforced pending the outcome of the litigation. Responsible Investor writes about the lawsuit and injunction stating:
“The current suit, bought by former president of the Oklahoma Public Employees Association Don Keenan and filed in December last year, requested a temporary injunction on a number of grounds. His case alleges four breaches of the Oklahoma state constitution. Following oral arguments and a review of submitted documents, an Oklahoma district court on Tuesday granted the injunction on two of the alleged breaches, where it found there was a “substantial likelihood” that the case would be successful.”
The trial court judge issued the injunction based on two of the petitioner’s four arguments in the case, though all four arguments were allowed to move forward. Additionally, since many anti-ESG investing laws are similarly structured, these arguments may cross-apply to other jurisdictions, though claims based on state constitutions may not translate as easily.
Reuters reports that following the decision, the Oklahoma Attorney General fired the outside legal team representing the state in the litigation. He also barred the State Treasurer, who personally selected the outside counsel, from further decision making regarding the litigation. This move is surprising and shows the strong political tensions surrounding the anti-ESG movement, even within the same political party. It will be interesting to see if this litigation has a ripple effect in other jurisdictions and just how viable the court’s find anti-ESG investing legislation.
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