Idaho lawmakers working on additional ‘ESG’ legislation
BOISE, Idaho (AP) — Potential new laws intended to limit state investments or contracts with companies that factor in such things as climate change and workers’ rights into their business practices will likely be introduced in the upcoming legislative session, lawmakers said Monday.
Republican Rep. Barbara Ehardt, in a presentation to the Federalism Committee, said draft legislation is being worked that involves ESG investing.
That’s a fast-growing investment movement aimed at increasing financial returns by considering environmental, social and corporate governance issues when deciding where to invest pension and other public funds.
Conservative lawmakers tend to view the strategy with suspicion.
“ESG truly is antithetical to our American way of life, to our constitution,” Ehardt said. “ESG is not free market, and I believe that is one of the key talking points that you’ll hear us continue to move forward with.”
Lawmakers earlier this year passed legislation that Republican Gov. Brad Little signed into law preventing ESG considerations from overriding state requirements that investments be made following the prudent investor rule.
Lawmakers also tried to pass a concurrent resolution earlier this year tasking the Federalism Committee to draft legislation “that protects the State of Idaho and its citizens from the use of ESG standards.” That legislation failed.
But the committee on Monday took up a discussion on the potential legislation from Ehardt, who is not a committee member.
Critics of the ESG legislation said the state’s prudent investor rule, which requires trustees to manage trust assets as a prudent investor would, already requires a prudent investor to factor in such things as ESG, and legislation restricting investment options allows political beliefs to override sound investing.
But Republican State Treasurer Julie Ellsworth said she has been working with Ehardt on the potential legislation and brought it to the attorney general’s office to be vetted.
“I can say that we have gone through the statutes of the state, and this language that is still a work in process, that we’ve aligned it with what is on the books, with how our investment and banking laws currently exist,” she said.
Ellsworth emphasized that the legislation she’s working on deals with public money.
“This is an important concept and a very important distinction,” she said.
Republican Rep. Megan Blanksma, an agribusiness owner and operator in southwestern Idaho, said she had not seen the proposed legislation and had some initial concerns.
“I’m curious to see what that legislation looks like, because there are a few of us in this world that would be harmed by our ability to contract,” she said. “I just want to make clear that we are still talking free market, and that some of us that contract with multinationals still have the ability to do so.”