States that limit business with banks that boycott fossil fuels could pay high cost, study says


Republican state policymakers’ efforts to boost fossil fuels by prohibiting their governments from doing business with companies that take sustainability into consideration has the potential to cost states millions, according to a study released Thursday.

Researchers looked specifically at the possible effects on Florida, Kentucky, Louisiana, Missouri, Oklahoma and West Virginia if they passed Texas-like legislation limiting investment options on municipal bonds and found it could cost them between $264 and $708 million in additional interest payments. The study noted that the states had not passed such broad legislation.

The six states are among two dozen that last year issued proposed or passed legislation prohibiting state government entities from doing business with financial firms that take environmental, social and corporate governance (ESG) into consideration when making investment decisions as anti-ESG efforts spread from state treasurers and attorneys general to governors and lawmakers. Republican policymakers refer to ESG as the “boycotting” of energy companies and argue that the investment funds are following a liberal agenda that hurts jobs.

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