Oklahoma is a major producer of gas and oil in the United States. Last week, a state judge barred a law that forbids pension systems in the state from working with companies that limit investment in the gas and oil industry.
Judge Sheila Stinson of Oklahoma County District issued a temporary injunction blocking the law’s enforcement. In her ruling, the judge explained that the state’s constitution required that retirement funds be managed exclusively for the beneficiaries’ benefit. She also noted that the law contained unclear and conflicting definitions for key terms, in addition to countering specific political agendas that would help the gas and oil industry.
This comes after it was determined that Don Keenan, a retiree, would probably win his suit, which was filed in 2023, alleging that the aforementioned law was too vaguely written and violated Oklahoma’s constitution. The state’s 2022 law is one of the many measures sponsored by GOP members across the country focused on freeing fossil-fuel companies from climate-based constraints adopted by some companies on Wall Street.
Similar laws speak on hot topics such as firearms and abortion rights.
Managers of big asset companies have been supporting fewer climate measures by shareholders and halted their support of industry efforts to decrease emissions, noting that companies have started taking steps to address environmental concerns. Currently, the state’s law prevents agencies in Oklahoma from working with financial companies that limit investments in energy firms. It also requires that the treasurer keep a list of these companies, even if they continue holding their shares in fossil-fuel companies.
Todd Russ, the treasurer, included Bank of America, JPMorgan Chase, Wells Fargo and BlackRock on the list in 2023. Russ stated that he was mainly looking out for the financial interests of Oklahoma’s citizens. He added that the ruling wouldn’t stop Oklahomans from fighting against activists using environmental, social and governance (“ESG”) in the state.
Legal experts note that Stinson’s decision demonstrates legal vulnerabilities of other laws to boycotts ESG approved by GOP members in other states.
Ropes & Gray lawyer Robert Skinner states that most of these laws that use pension assets as a political tool for the implied protection of certain industries goes against state laws which mandate that pensions shall be managed solely in the interest of retirees.
U.S. SIF’s MD of sustainable investment organization, Bryan McGannon, stated that Stinson’s move demonstrated that anti-ESG laws weren’t in the best interests for beneficiaries. McGannon adds that financial professionals needed freedom to make ideal investment choices for beneficiaries.
As anti-ESG groups focus on investment funds championing sustainability, individual entities such as First Tellurium Corp. (CSE: FTEL) (OTCQB: FSTTF), are, of their own accord, taking ESG into consideration as they plan and execute their business operations.
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