Idaho Republicans concerned about environmental and social investment standards – Low Calorie Diets Tips

BOISE (Idaho Capital Sun) – While some Idaho lawmakers and advocacy groups have expressed deep concerns about environmental, social and governance standards in business, saying it’s part of a “waking up agenda” by liberal activists, is the president of the largest state, Gem State, The Standards are the latest “boogeyman” set to sow political chaos and division, according to the trade association.

A large group of Idaho politicians and lobbyists met Tuesday at the Statehouse for a discussion on the standards — better known as ESG — in the area of ​​credit ratings and corporate investments. ESG ratings are part of a process designed to measure certain aspects of a company or entity that may indicate social awareness, commitment to sustainability and potential investment risks.

The environmental factors for ESG scores include considerations such as carbon emissions, air and water pollution, and green energy initiatives, while the social components include commitment to diversity and customer satisfaction, and the governance includes factors such as board member diversity, executive compensation, and lobbying activities.

Idaho Treasurer Julie Ellsworth moderated the discussion with U.S. Sen. Mike Crapo, R-Idaho, who joined remotely, as well as Sen. Steve Vick, R-Dalton Gardens, and Rep. Sage Dixon, R-Ponderay. Guest speakers included Vivek Ramaswamy, an entrepreneur who wrote a book called Woke, Inc: Inside Corporate America’s Social Justice Scam, Marlo Oaks, Utah State Treasurer, and Derek Kreifels, CEO of the State Financial Officers Foundation.

ESG as a business concept is not new and has been around for more than a decade, particularly in the natural resources space, said Alex LaBeau, president of the Idaho Association of Commerce and Industry.

What’s new? Latest updates from federal organizations, including Standard & Poor’s, a global rating agency, and the Securities and Exchange Commission, a federal agency that regulates market activities. Both organizations have announced efforts to update and clarify ESG standards over the past year.

LaBeau said he has issues with what he believes to be the arbitrary way the federal standards were decided without input from stakeholders. The Securities and Exchange Commission has largely focused on climate factors as part of President Joe Biden’s focus on climate change.

“These criteria may seem harmless on the surface, but unfortunately many standards are subjective and grant regulators and companies undue influence over public policy,” Crapo said during the meeting. “Instead of going to legislatures and the state congress to debate and pass laws and policies, they are trying to bypass voters and pressure financial institutions to reduce lending to disadvantaged companies or states.”

Utah officials protested a “moderately negative” climate rating

Standard & Poor’s released a subscriber-only report in late March assigning ESG ratings to states, with most states, including Idaho, classified as “neutral.” Conditions were rated on a scale of one to five, with one being the most positive. None of the states received a one-score on environmental, social, or governance factors.

Utah’s environmental rating was a three, meaning “moderately negative,” according to a report by Bloomberg, due to concerns about its long-term water supply. California and New York received the same rating.

“We’ve been told that if we don’t deal with climate change, we’re going to lose the globe, we’re all going to die because climate is an existential threat,” Oaks said. “What we don’t hear is what it costs to walk the path we are being led down. What does it cost to get rid of traditional energy? … Think of the 19th-century Amish lifestyle. That’s what we’re talking about.”

Oaks said the insurance company for one of Utah’s utility companies was recently notified that coverage for its fleet of vehicles would not be renewed because the company owned a coal-fired power plant and had interests in two other related companies. The utility has been told that the insurer’s insurance company is cutting ties with companies that benefit from coal power.

“It’s very easy to see that if at some point in the not too distant future (you and I) don’t have the right profile, if we don’t behave appropriately … we might also be denied service,” Oaks said. “That’s what I call the politicization and arming of capital. And we have to stop that.”

The Idaho Legislature’s Interim Committee on Federalism met immediately after the ESG discussion and further discussed the issue with Jonathan Williams, a chief economist for the American Legislative Exchange Council, and Scott Shepard, director of the Free Enterprise Project. Williams said Idaho should consider additional legislation aimed at keeping ESG out of public pension investments over the next year.

Idaho’s governor, attorney general and others sent a letter objecting to the ESG rating

In May, many Idaho officials, including the Idaho congressional delegation and Gov. Brad Little, sent a letter to Standard & Poor’s protesting the March report assigning ESG ratings to states. Idaho received a rating of two in all three areas, representing a neutral rating, with the comment, “ESG factors do not materially impact our credit rating analysis for Idaho.” According to the S&P report, this designation means there is insufficient information gave to make a decision about Idaho one way or the other. As such, rating would not yet affect Idaho’s credit rating or creditworthiness.

In the letter, state officials describe Idaho’s solid credit ratings and robust reserve funds, and say the state is carefully managing its finances.

“In short, Idaho is solvent and should not be penalized by you or any other entity for its sovereign decisions,” the letter said.

Officials also said that the governance score attributed to Idaho should have been nothing but positive because the agency’s statement on the assessment discussed forward-looking governance decisions and risk mitigation without identifying means of measuring those factors.

“This can only mean that either the ratings are political or S&P does not investigate and simply publishes general ratings,” the letter reads. “Neither scenario is acceptable for Idaho. We respectfully request that S&P withdraw these ratings immediately and stop engaging in non-objective rating criteria.”

Other countries have also discussed the topic and taken measures in connection with ESG scores. In June 2021, Texas Gov. Greg Abbott signed legislation banning government investment in companies that have severed ties with the oil and gas industry. In late May, the New York Times reported that the West Virginia state treasurer had withdrawn money from one of the world’s largest financial institutions, BlackRock, after the company identified climate change as an economic risk.

Idaho already took action on ESG during the 2022 legislature

Earlier this year, Idaho lawmakers passed an ESG-related law, Senate Bill 1405, that prohibits any Idaho public agency involved in investment activities from considering ESG characteristics in a way that is typical of prudent investment rules would override.

The House of Representatives also voted in a concurrent resolution opposing the standards, saying the standards are “destined to create a ‘great reset’ of capitalism.”

LaBeau said this mindset is being driven by people who want to sell books, including conservative commentator Glenn Beck, who visited Republican lawmakers at the Idaho Capitol in February and discussed the issue with lawmakers and conservative groups like the Heritage Foundation.

LaBeau expects the issue to be a focus of the 2023 legislative session and said he’s frustrated that the conversation isn’t focusing on the broader issues surrounding climate change, but instead on what he calls fear mongering.

“It’s become more of a bumper sticker fight than actually talking about the problem itself,” LaBeau said. “Climate change is real, we know it’s real, we all know the factors involved. So what technologies are available (to mitigate them) and how can we bring them online in a meaningful way, and what is capital willing to risk?”

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