Idaho lawmakers have embarked on their second attempt to ban some companies from considering environmental impacts in investment decisions with help from outside national lobbying groups.
The Western state is one of several red states considering legislation that would ban investment practices that use environmental, social, and governance factors. The bills in Idaho have been significantly influenced by national conservative organizations, according to a report by the Idaho Statesman.
“As long as legislators are asking for help and support … we’ll be there to help them,” Doug Taylor, a lobbyist for Opportunity Solutions Project, said. The Opportunity Solutions Project works with the Foundation for Government Accountability, the Florida-based organization that drafted the proposed legislation.
House Bill 669 would ban banks from using ESG factors in investments. It would also prohibit government agencies across the state from contracting with companies that “boycott oil and mining companies or gun manufacturers.”
Another bill targeting ESG, Senate Bill 1291, would bar companies already contracted with the state government agencies from boycotting energy industries that use fossil fuels and the gun industry.
Republican state Sen. Doug Ricks, who co-sponsored the bill, said he wants to protect industries from “outside influences, big corporations from outside Idaho from telling us what is important in our state.”
Some Democrats in the state said that ESG bans would actually increase government oversight of businesses.
“Essentially what we are doing is growing government at all levels of government,” Boise Democratic Rep. Brooke Green said in her debate against the bills.
“We are actually putting in place and policing our businesses — regulations on how they are going to conduct business with the state and all of our levels of government. It is the heavy hand that we are putting onto businesses, rather than getting out of their way,” Green said.
ESG has seen backlash from Republicans, who have said the practice is “woke.”
“We don’t want these institutions to force their ideological beliefs down on the people,” Republican state Rep. Josh Tanner, who sponsored the House bill, said.
Idaho Attorney General Raul Labrador said he does not want to see “environmental ideology” in law.
“They have a clear fiduciary obligation to their investors to maximize their returns, not prioritize environmental ideology,” Labrador said.
“Some of the largest banks and corporations out there are seeing how much climate change can negatively impact their long-term businesses,” Ryan McGoldrick, a lobbyist for environmental group Conservation Voters for Idaho, told the Idaho Statesman. “They would like to avoid something that’s causing huge economic issues around the world.”
Trent Wright, president and CEO of the Idaho Bankers Association, said banks use ESG to make more informed financial decisions related to investments.
“Banks make financial business decisions based on risk,” Wright said. “If they’re going to lend to a small business, they want to make sure that the governance structure of that small business is such that they’re going to be successful in the long run, and be a good investment. … If it’s an environmental type of company, like coal, for example, they’re going to want to look at the long-term sustainability of the coal industry.”
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Last year, Idaho passed other legislation to counter ESG efforts. State legislators banned ESG from being used in state procurement bids and barred banks that have state funds from ESG activities.
“Imposing subjective standards to choke off capital to disfavored industries is a disservice to businesses, employees, and investors,” Sen. Mike Crapo (R-ID) said on the previous bills. “Unelected bureaucrats should not weaponize our financial system in this way.”