Financial companies that boycott the energy industry are pushing "anti-American" political agenda, Oklahoma Gov. Kevin Stitt told Fox News.
"ESG is kind of rewriting how you invest. Instead of focusing on value for your shareholders, it's more of a political agenda," the governor said. "It breaks down the free market principles of capitalism that we're used to in investing and so it's anti-American."
Environmental, social and corporate governance — commonly referred to as ESG — are non-financial standards applied to firms and can be used by asset managers in their decision-making surrounding investments. Firms with low emissions or progressive policies surrounding issues like diversity receive higher scores.
Proponents have argued that ESG scores will push companies to adopt more environmentally friendly and progressive policies, while critics say using them to determine investments harms essential fossil fuel industries and raises energy prices.
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"As the governor, I'm trying to protect our assets," Stitt said. "We are a heavy energy state."
Oklahoma is among the top five largest producers of natural gas, oil and wind energy in the U.S, according to the U.S. Energy Information Administration. The state relies heavily on the energy sector for tax revenue and has seen a statewide revenue increase of 74% for oil and gas gross production receipts since last year.
"Let's not do business with companies that are anti-American or they're anti-energy or they're anti the assets in our states," Stitt told Fox News.
"These companies that are refusing to do business with oil and gas companies, banks that are refusing to do business with oil and gas companies, it can hurt our assets. It can hurt our state," the Oklahoma Republican continued. "They're actually investing for some kind of social issue."
Numerous Republican-led states have pressed against financial institutions, such as BlackRock, that they say are boycotting the fossil fuel industry. In August, 19 attorneys general sent a letter to CEO Larry Fink, saying BlackRock appears to undercut shareholder profits in state pension funds. BlackRock, the world's largest asset manager, has denied that it boycotts fossil fuel firms and argued that climate change is becoming a greater financial risk.
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In May, Stitt signed a bill into law that prevents the state government from investing in firms that discriminate against oil and natural gas producers. Critics said the legislation increases regulation and could ultimately cause prices to rise.
"We've passed laws, an anti-discrimination act, where we're not going to invest our funds or our pension funds in companies that refuse to do business with our state or refuse to do business with the oil and gas industry," Stitt said.
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"Why would you invest in companies that don't have a fiduciary duty or they're not actually focused on the shareholder or maximizing profits or investing for profits?" the Oklahoma Republican added.
Stitt also said firms that embrace ESG are "not having an honest conversation about the needs of Americans."
"We're still driving our kids to school, driving them to soccer practice, heating our homes and our businesses and when you choke off demand, prices are going to go up," he told Fox News.