Jonathan Small | September 28, 2022
ESG targets Oklahoma economy, jobs
During a recent state legislative hearing, Brook Simmons, president of the Petroleum Alliance of Oklahoma, gave policymakers a reality check. He pointed out that oil and gas companies produce far more jobs in Oklahoma than do “green” industries. And oil and gas jobs are also much better paying.
Citing U.S. Bureau of Labor Statistics data, Simmons noted the wind industry employs only 414 full-time workers in Oklahoma. In contrast, oil and gas generated one-fourth of household earnings in the state and contributed $19 billion to Oklahoma’s state GDP in 2020.
Another example of reality bursting the narrative bubble of anti-energy zealots came from (where else?) California. Policymakers in that state recently acted to ban the sale of cars with gasoline engines by 2035. And within what seemed a matter of days, California officials also begged state citizens to not charge their electric cars during the day. It seems the state’s electrical grid can’t handle the load created by the current fleet of electric vehicles—so things are poised to get much worse by 2035 as that fleet grows in size.
These two incidents are worth noting because there is a move underway to indirectly coerce states like Oklahoma to follow California’s path and abandon the good-paying, economically vital jobs Simmons highlighted.
Through imposition of “environmental, social, and governance” (ESG) policies, large money managers are trying to impose left-wing political views on the broader populace.
Under the ESG scheme, large financial firms base their investment strategies on ESG grades given to companies. Most notably for Oklahoma, such policies penalize fossil fuel companies. Supposed “green” businesses get higher ESG scores than do traditional energy producers.
Not only do ESG policies penalize energy production to prop up “green” companies, but they also pressure businesses to take stances on non-economic issues such as redefining gender, promoting Critical Race Theory, and abortion tourism.
It’s estimated that assets under management of global exchange-traded funds that publicly set ESG investment objectives total more than $2.7 trillion. As a result, a significant amount of capital is allocated away from productive use by these policies, and the threatened harm to Oklahoma is very real.
But Oklahoma policymakers can, and are, pushing back. Oklahoma is among the states refusing to allow its pension assets to be managed by funds that promote ESG goals. Instead of ESG, firms that handle Oklahoma’s pension assets must act in the sole financial interest of the shareholder (the state). Further legislation could be considered.
With billions in pension assets from multiple states now off-limits, financial funds are having to choose between ideological zealotry or a healthier bottom line. And Oklahoma is ensuring better returns for its pension system by using financially serious companies for management rather than ESG supporters.
When left-wing ideologues cannot win policy battles at the voting booth, they often resort to indirect coercion. Fortunately for Oklahomans, our state doesn’t have to yield to their efforts.
Jonathan Small, C.P.A., serves as President and joined the staff in December of 2010. Previously, Jonathan served as a budget analyst for the Oklahoma Office of State Finance, as a fiscal policy analyst and research analyst for the Oklahoma House of Representatives, and as director of government affairs for the Oklahoma Insurance Department. Small’s work includes co-authoring “Economics 101” with Dr. Arthur Laffer and Dr. Wayne Winegarden, and his policy expertise has been referenced by The Oklahoman, the Tulsa World, National Review, the L.A. Times, The Hill, the Wall Street Journal and the Huffington Post. His weekly column “Free Market Friday” is published by the Journal Record and syndicated in 27 markets. A recipient of the American Legislative Exchange Council’s prestigious Private Sector Member of the Year award, Small is nationally recognized for his work to promote free markets, limited government and innovative public policy reforms. Jonathan holds a B.A. in Accounting from the University of Central Oklahoma and is a Certified Public Accountant.