A bill passing the Montana House of Representatives would prohibit the state from making investment decisions based on the environmental, social and governance philosophies of companies and funds, a framework often abbreviated as ESG.
Greg Gianforte’s administration supports House Bill 228, and Republicans clamored for the issue at a press conference last week.
“The trend on Wall Street is that activists have awakened capitalism through ESG investing,” Gianforte said in a prepared remark Friday. “ESG prioritizes climate change and social justice over maximizing returns. It prioritizes stakeholders over shareholders.”
Three-letter acronyms have become four-letter words within conservative news media, blamed on divestment strategies that have kept portfolios away from companies and sectors that are socially controversial or environmentally problematic. I’m here. Nationwide, some institutional investors are choosing to sacrifice potential returns for more value-based investments, rather than basing their decisions solely on profit.
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Proponents of ESG approaches also note that many of these decisions, such as selling off coal, can be aligned with prudent long-term investment decisions. But it has drawn the ire of those who are losing investors over new investment strategies, such as gun makers and carbon-intensive companies.
The latter industry backed the bill last week, along with supporters such as the Montana Petroleum Institute and the Treasure State Resources Association.
But one of the bill’s opponents, Derf Johnson of the Montana Environmental Information Center, said the bill’s requirement that the board must use “monetary factors only” would not allow the state’s Russia-related assets to be used. He said it could go against the governor’s desire to sell. Last year war broke out in Ukraine.
“Montana is reviewing assets and operations that could benefit Vladimir Putin, his profiteering oligarch cadres, and his vicious war machine,” Gianforte said last year. I wrote in a social media post on the moon.
At the time, investment commission executive director Dan Villa said the state’s sale of such assets for about $14 million was more a matter of fiscal prudence than a political statement. rice field.
“Sometimes our society recognizes that there are organizations that have trouble making decisions,” Johnson said. “And we don’t want to deal with them. Modern slavery is an example.”
In an exchange with one of the committee’s members, the bill’s sponsor, Rep. Terry Moore, a Billings Republican, said the board could only cut ties with investments based on dollars and cents. said.
“They can assess whether it is in their financial best interests to sell on behalf of the Montanans given the circumstances and the circumstances at hand,” Moore said. The criteria will be based on financial criteria, not on criteria like ESG.”
Villa, who testified in support of the bill, previously told the House Committee on State Administration that the bill primarily codifies existing practice regarding state investment pools. He even brought a small model of his tank truck to his January 12 meeting as a visual prop on Rails, representing the “hundreds of oil tanker trucks” currently owned by the state’s giant pension fund. I came.
“We look at it and go where the money is,” said Villa. will not be Boycott this or boycott that?” We go into ‘What is your investment theme?’ ”
The Montana House Judiciary Committee voted 13 to 6 in favor of House Bill 228 on Tuesday, with all Republicans supporting it.
“We’re really just saying that we’re codifying Montana’s investment policy, and we’re only going to consider financial factors,” said R-Libby Rep. Neil Durham.
Rep. SJ Howell of Missoula was among the Democrats who opposed the bill.
“I think this unnecessarily binds the hands of the state to respond to unusual but important situations, such as Russia’s invasion of Ukraine,” they said.
Now head to the entire house floor for consideration.
