Kansas passes anti-ESG bill, but it’s milder than some want

Apr 6, 2023, 9:33 PM | Updated: 10:04 pm

Kansas state Sen. Mike Thompson, R-Shawnee, confers with Jason Long, an attorney on the Kansas Legi...

Kansas state Sen. Mike Thompson, R-Shawnee, confers with Jason Long, an attorney on the Kansas Legislature's bill drafting staff before a meeting of the Senate committee Thompson chairs, Tuesday, March 7, 2023, at the Statehouse in Topeka, Kan. Thompson is leading an effort to prevent the state from investing its funds using environmental, social or governance principles. (AP Photo/John Hanna)
Credit: ASSOCIATED PRESS

(AP Photo/John Hanna)

TOPEKA, Kan. (AP) — A proposal designed to thwart investing that considers environmental, social and governance factors has cleared the Kansas Legislature, but divisions within its GOP majorities kept the measure from being as strong as some conservatives wanted.

Lawmakers on Thursday approved a bill that would prevent the state, its pension fund for teachers and government workers and its cities, counties and local school districts from using ESG principles in investing their funds or in awarding contracts. Such investment strategies have become the target of GOP lawmakers across the country who argue they are focused more on pushing political agendas rather than earning the best returns.

At least seven states, including Oklahoma, Texas and West Virginia, have enacted anti-ESG laws in the past two years. GOP Govs. Ron DeSantis of Florida and Greg Gianforte of Montana also have moved to ensure their states’ funds aren’t invested using ESG principles.

Some conservatives lawmakers in Kansas wanted to require managers of private funds to either disclose to clients that ESG principles guide their investing or to get clients’ written consent to use ESG. Republican state senators backed a plan to force the state pension fund to divest from nations identified by the U.S. government as foreign adversaries, including China.

But proposals to impose new rules for private money managers spurred a strong backlash from influential business and banking groups. House members said the provision requiring the pension fund to divest from other nations was written so broadly that it would prevent investing in companies founded by immigrants fleeing oppression.

“We right here wanted to focus on what we control — state pensions, state investments, government contracts, stuff like that,” said Republican state Rep. Nick Hoheisel, of Wichita, chair of the House committee handling the legislation.

The votes to approve the bill were 76-47 in the House and 27-12 in the Senate and sent the measure to Democratic Gov. Laura Kelly. While almost all of the state’s Democratic lawmakers voted “no,” Kelly has not said what she will do. Supporters had the two-thirds majority needed to override a veto in the Senate, but not in the House.

“It’s still a panicked response to a fake issue that’s been created by right-wing media,” said state Rep. Rui Xu, a Kansas City-area Democrat.

About one-eighth of U.S. assets being professionally managed, or $8.4 trillion, are being managed in line with ESG principles, according a report in December from US SIF, which promotes sustainable investing.

Supporters of ESG principles in investing argue that it’s financially more prudent to consider issues such as whether a shift to green energy makes investing in fossil fuel companies riskier. Last month, hundreds of investors, companies and institutions signed on to a “Freedom to Invest” statement arguing that ignoring “the robust economic benefits” of clean energy represented a failure to build a stronger economy.

“Climate change poses a threat to the safety of our communities and the long-term value creation of the economy, and addressing its risks upholds investors’ fiduciary duty,” the statement said.

Xu said that even the mildest version of the bill still would hinder cities and counties when awarding contracts. Hoheisel said he’s not worried about it being a problem.

Across the U.S., the criticism of ESG from Republicans has sometimes been heated.

Last month, 19 GOP governors, including DeSantis and Kristi Noem of South Dakota, issued a joint statement calling ESG a “direct threat to the American economy, individual economic freedom, and our way of life.” And Utah’s Republican state treasurer told a GOP gathering that ESG “opens the door to authoritarianism” and is “Satan’s plan.”

Kansas state Sen. Mike Thompson, a conservative Kansas City-area Republican and chair of the Senate committee handling the legislation, backed the provisions on private managers and investments outside the U.S.

While he wouldn’t go as far as the governors or Utah treasurer, Thompson argued that pushing investors away from lumber, mining, agriculture or fossil fuel companies harms industries critical to the economy and hurts national security.

Still, most of the Kansas debate centered on whether investment earnings drop when managers use ESG principles.

Kansas State Treasurer Steven Johnson, who supports the bill, said: “We’re interested in the highest and best return for Kansas.”

___

Follow John Hanna on Twitter: https://twitter.com/apjdhanna

United States News

Associated Press

16 South American migrants who entered US through Texas flown to California

SACRAMENTO, Calif. (AP) — Sixteen Venezuelan and Colombian migrants who entered the country through Texas were flown to California by chartered plane and dropped off outside a church in Sacramento, Gov. Gavin Newsom and migrant rights advocates said Saturday. The young men and women were dropped off Friday outside the Roman Catholic Diocese of Sacramento […]

19 hours ago

Associated Press

Florida woman charged with child neglect after her car catches fire as she was allegedly shoplifting

OVIEDO, Fla. (AP) — A Florida woman faces charges of aggravated child neglect and arson after her car became engulfed in flames while she was allegedly shoplifting at a mall, according to an arrest report. Alicia Moore, 24, parked her car in a parking lot outside a Dillard’s department store at Oviedo Mall on May […]

19 hours ago

(Korean Central News Agency/Korea News Service via AP)Credit: ASSOCIATED PRESS...

Associated Press

US, allies clash with Russia, China over North Korea’s failed military spy satellite launch

The United States and its allies clashed with Russia and China on Friday over North Korea’s failed launch of a military spy satellite this week in violation of multiple U.N. Security Council resolutions.

19 hours ago

Associated Press

What led Capitol Police to stop a youth performance of the ‘Star-Spangled Banner’

Video of a children’s choir singing the national anthem in the U.S. Capitol, only to be unceremoniously cut off by police, spread across social media on Friday. Capitol Police say singers from Rushingbrook Children’s Choir from Greenville, South Carolina, were stopped May 26 because of a miscommunication. Musical performances in the hallowed seat of Congress […]

19 hours ago

Associated Press

Texas bans gender-affirming care for minors after governor signs bill

AUSTIN, Texas (AP) — Texas has become the most populous state to ban gender-affirming care for minors after Gov. Greg Abbott signed legislation on Friday. Texas joined at least 18 other states that have enacted similar bans. Every major medical organization, including the American Medical Association, has opposed the bans and supported the medical care […]

19 hours ago

A police officer shines his flashlight downward as he pauses on Hollywood Beach while investigating...

Associated Press

Florida police arrest man, search for 2 others in Memorial Day beach shooting

HOLLYWOOD, Fla. (AP) — Police in Florida arrested one man Saturday and announced arrest warrants for two others believed to be the gunmen who opened fire along a crowded beachside promenade on Memorial Day, wounding nine people. The Hollywood Police Department said authorities arrested Jordan Burton and are searching for Ariel Cardahn Paul and Lionel […]

19 hours ago

Sponsored Articles

...

SANDERSON FORD

Thank you to Al McCoy for 51 years as voice of the Phoenix Suns

Sanderson Ford wants to share its thanks to Al McCoy for the impact he made in the Valley for more than a half-decade.

...

re:vitalize

Why drug-free weight loss still matters

Wanting to lose weight is a common goal for many people as they progress throughout life, but choosing between a holistic approach or to take medicine can be a tough decision.

...

Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

Kansas passes anti-ESG bill, but it’s milder than some want