Weekly Opinion Editorial
DANCE WITH THE ONE WHO BROUGHT YOU!
by Steve Fair
In May of 2022, House Bill # 2034, authored by Rep. Mark McBride, (R-Moore) and Sen. Mark Allen, (R-Spiro), was signed into law. Titled the Energy Discrimination Elimination Act of 2022, it requires the state to divest from any financial company that boycotts the energy industry. McBride said, “This law protects all Oklahomans from the overreach of companies who think they can govern our population through the use of political environmentalism.” Legislative Democrats said the law protects the oil industry in Oklahoma and they believe the oil industry can take care of itself. McBride countered that the energy sector was a major employer in the state and contributed billions to the state’s economy and loyalty mattered.
On Wednesday, State Treasurer Todd Russ, (R-Cordell) notified thirteen (13) financial institutions they are not eligible to conduct business with the state of Oklahoma because they violate HB#2034. The businesses now have the opportunity to clarify their activities and then there is a step-down period before the bank/financial institution are kicked to the curb. Three observations:
First, companies who have ESG policies must be willing to face the consequences. Environmental, Social, and Governance (ESG) investing refers to a set of standards for a company’s behavior used by socially conscious investors to screen potential investments. Bottom line: a bank with an ESG policy doesn’t invest in oil/gas companies. Most financial experts agree ESG policies are significantly more risky than non-ESG policy. Oklahoma taxpayers are better off not having their money being invested by ‘woke’ bankers.
Second, the energy sector is king in Oklahoma. According to the Oklahoma Energy Resources Board, the total economic impact of 4,000 oil and gas businesses in the state in 2022 was $64.9 billion, a whopping 27% of the state’s total economic activity. Nearly 200,000 Oklahomans, making $24 billion dollars are directly or indirectly employed by the energy sector. As the old saying goes: ‘dance with the one who brought you.” In other words- be loyal!
Third, Todd Russ is enforcing the law. That should be commended. All too often, elected officials are relucent to do the hard part of the job. Russ received questionnaires from nearly 160 financial institutions and after identifying thirteen (13) who have ESG policies that violate HB#2034, he notified state entities/agencies. They are to contact the offending financial institution and give them a chance to ‘explain themselves,’ before they are given the boot. It remains to be seen if the bureaucrats will be as vigilant as the treasurer. The agencies have a year to get it done.
In the 1960s, businesses, big and small, focused exclusively on profit. Businesses were not expected to have a conscience. They provided jobs. The purpose of a business was to create customers and to offer value to those customers. Changing the world and public policy wasn’t a business objective- maximizing profit was their cornerstone.
Corporate Social Responsibility (CSR), the precursor of ESG came along in the late 1960s. A few businesses began to market and position their company and brands to appeal to social conscious consumers. Sixty years ago, that was a narrow/niche market, e.g.: Ben & Jerry’s Ice Cream. Fast forward to 2023 and CSR/ESG is now mainstream. The list of banks Russ released includes Blackrock, Wells Fargo, J.P Morgan, and Bank of America, some of the largest financial institutions in the country. Blackrock has already announced they are willing to lose the business- they are not willing to change their ESG policy. Standing up for a liberal cause and willing to lose profit is admirable- unless you own stock in Blackrock. Consumers can change a businesses’ policy by boycotting businesses who implement policies Business policy/convictions/conscience change rapidly when profits are impacted by dumb decisions. Alienating half of potential customers isn’t a sound strategic initiative.