


The group representing Republican state financial officers announced it is forming a political arm in order to defend its members and push back harder against ESG.
The State Financial Officers Foundation has been at the forefront of combating ESG, which stands for environmental, social, and governance. As financial firms have adopted ESG to guide investment decisions, Republicans have increasingly opposed it, arguing that it is used to advance progressive goals through the financial system.
SFOF Action is the new 501(c)(4) announced on Tuesday. The group’s executive director, Noah Wall, told the Washington Examiner that the entity has two specific goals: providing a “full defense” of state treasurers and state auditors who are “coming under attack” from firms like BlackRock.
“There has been a dramatic uptick in their state-level lobbying, and we believe that’s a direct result of the work that our members and others have done to divest because of their approach to ESG,” he said during an interview.
Wall also said that the new political arm is focusing on preventing “the Left” from taking over state financial officer positions. He said that has already occurred at the local and state level with officials like prosecutors and secretaries of state, and that SFOF Action would work to combat any of those efforts.
ESG has become a political hot potato, so the new group forming during an election year is notable. According to a news release, the new political advocacy organization will support “common-sense, pro-growth policy proposals that restore fidelity to fiduciary duty.”
Republican state treasurers have made waves by pushing back on ESG over the past several years.
For instance, just this month, West Virginia Treasurer Riley Moore announced his state is banning four more banks from state contracts over their ESG policies and “boycotts” of fossil fuel companies.
The state had already placed five firms on its restricted institutions list — BlackRock, Goldman Sachs, J.P. Morgan, Morgan Stanley, and Wells Fargo. The first five firms on the list have lost access to some $18 billion in annual inflows and outflows.
In a cease-and-desist order last month, Mississippi Secretary of State Michael Watson accused money manager BlackRock of making “fraudulent statements, omissions, and other misrepresentations” about its environmental, social, and governance strategies.
Also recently, Texas State Board of Education Chairman Aaron Kinsey notified BlackRock that the state was pulling some $8.5 billion in investments from it over its ESG policies.
The shift away from fossil fuels is part of the larger corporate move toward the prioritization of ESG goals. Proponents argue that ESG is a way the finance and business sectors can help reform society, such as by mitigating the effects of climate change. Those who oppose ESG say it distorts the economy and even the culture.
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Organizers of SFOF Action hope that it will build off that momentum.
Wall said that most SFOF members are not up for reelection this year, so the new group won’t be doing electoral work. He said, though, it is very clear that BlackRock and other firms will be stepping up lobbying in an election year and the new group is in place to bolster efforts to combat ESG.