Wednesday, September 14, 2022

Small: ESG targets Oklahoma economy, jobs

The new leftist “environmental, social, and governance” (ESG) obsession is beginning to infiltrate and impact an awful lot of the American economy. Working in the cleaning and restoration field, I've begun to notice it creeping into industry surveys and publications, sometimes obscurely, sometimes overtly. Read on for a column by OCPA President Jonathan Small on ESG and Oklahoma's economy:

ESG targets Oklahoma economy, jobs
By Jonathan Small

During a recent state legislative hearing, Brook Simmons, president of the Petroleum Alliance of Oklahoma, gave policymakers a reality check. He pointed out that oil-and-gas companies produce far more jobs in Oklahoma than do “green” industries. And oil-and-gas jobs are also much better paying.

Citing U.S. Bureau of Labor Statistics data, Simmons noted the wind industry employs only 414 full-time workers in Oklahoma. In contrast, oil and gas generated one-fourth of household earnings in the state and contributed $19 billion to Oklahoma’s state GDP in 2020.

Another example of reality bursting the narrative bubble of anti-energy zealots came from (where else) California. Policymakers in that state recently acted to ban the sale of cars with gasoline engines by 2035. And within what seemed a matter of days, California officials also begged state citizens to not charge their electric cars during the day. It seems the state’s electrical grid can’t handle the load created by the current fleet of electric vehicles—so things are poised to get much worse by 2035 as that fleet grows in size.

These two incidents are worth noting because there is a move underway to indirectly coerce states like Oklahoma to follow California’s path and abandon the good-paying, economically vital jobs Simmons highlighted.

Through imposition of “environmental, social, and governance” (ESG) policies, large money managers are trying to impose left-wing political views on the broader populace.

Under the ESG scheme, large financial firms base their investment strategies on ESG grades given companies. Most notably for Oklahoma, such policies penalize fossil fuel companies. Supposed “green” businesses get higher ESG scores than do traditional energy producers.

Not only do ESG policies penalize energy production to prop up “green” companies, but they also pressure businesses to take stances on non-economic issues such as redefining gender, promoting Critical Race Theory, and abortion tourism.

It’s estimated assets under management of global exchange-traded funds that publicly set ESG investment objectives total more than $2.7 trillion. As a result, a significant amount of capital is allocated away from productive use by these policies, and the threatened harm to Oklahoma is very real.

But Oklahoma policymakers can, and are, pushing back. Oklahoma is among the states refusing to allow its pension assets to be managed by funds that promote ESG goals. Instead of ESG, firms that handle Oklahoma’s pension assets must act in the sole financial interest of the shareholder (the state).

With billions in pension assets from multiple states now off-limits, financial funds are having to choose between ideological zealotry or a healthier bottom line. And Oklahoma is ensuring better returns for its pension system by using financially serious companies for management rather than ESG supporters.

When left-wing ideologues cannot win policy battles at the voting booth, they often resort to indirect coercion. Fortunately for Oklahomans, our state doesn’t have to yield to their efforts.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.


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