OKLAHOMA CITY – Rep. Mark McBride, R-Moore, today commented on legislation he authored that will ban 13 major financial institutions from state contracts as a result of their environmental, social and governance (ESG) policies.

House Bill 2034, the Energy Discrimination Elimination Act of 2022, signed into law last May, took effect Nov. 1. The measure requires the state to divest from any financial company that boycotts the energy industry. This week, State Treasurer Todd Russ notified 13 financial institutions that they are ineligible for state contracts as a result of the new law. Companies have the opportunity to clarify their activities and a step-down period is in place before complete divestment.

"This legislation ultimately protects all Oklahomans from the overreach of companies that think they can govern our population through the use of political environmentalism," McBride said. "Fossil fuels such as oil and gas are a major contributor to the livelihood of many Oklahoma's as well as our overall economy. This critical industry employees thousands of Oklahomans and adds tremendously to our tax base. We must protect our assets as a state."

ESG standards prioritize environmental investments and favor green energy projects, once deemed risky by financial advisors, over oil and gas investments. Critics – including attorneys general, state treasurers and consumer groups – say the policies ignore legally mandated fiduciary responsibilities and often don't align with a client's personal values.

McBride pointed out that the state has diversified to include other energy sources, but fossil fuels are still a backbone of the state's economy.

According to the Oklahoma Energy Resources Board, the total economic impact of oil and gas and component industries in the state in 2022 was $64.9 billion, 27% of the state's total economic activity. This included 198,965 direct or supporting jobs and $23.7 billion in salaries and wages.

In line with the law's requirements, State Treasurer Todd Russ this week released a list of financial institutions now ineligible for state contracts because they are engaged in boycotts of fossil fuel companies or they failed to reply to a questionnaire inquiring about their ESG policies.

The list includes Blackrock, Wells Fargo & co., JPMorgan Chase & Co., Bank of America and State Street. A full list of restricted financial companies is on the state treasurer's website: Restricted_Financial_Companies_Statement.pdf (ok.gov). Other companies may be added to or removed from the list every 90 days as the internal analysis continues, according to the treasurer's office.

Russ reported his office received responses from nearly 160 financial institutions that were sent questionnaires.

HB2034 requires the state treasurer to maintain and provide to each state governmental entity a list of financial companies that boycott energy companies. These entities must then notify the treasurer of the listed financial companies in which they own direct or indirect holdings.

The entity also must send a written notice to the financial company warning that it may become subject to divestment and offer the company the opportunity to clarify its activities. A state governmental entity must rid itself of at least 50% of the assets of a listed financial company within 180 days of the financial company receiving notice and 100% of the assets within 360 days after notice unless a loss of assets can be proven. 

Entities also must report to the treasurer, the Legislature and the state's attorney general any securities sold, redeemed, divested, or withdrawn from a listed financial company.