{"id":133443,"date":"2023-07-10T11:31:49","date_gmt":"2023-07-10T11:31:49","guid":{"rendered":"https:\/\/fin2me.com\/?p=133443"},"modified":"2023-07-10T11:31:49","modified_gmt":"2023-07-10T11:31:49","slug":"analysis-new-anti-esg-rule-in-missouri-offers-us-republicans-another-path-away-from-wokeness","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/analysis-new-anti-esg-rule-in-missouri-offers-us-republicans-another-path-away-from-wokeness\/","title":{"rendered":"Analysis-New anti-ESG rule in Missouri offers US Republicans another path away from 'wokeness'"},"content":{"rendered":"

(Reuters) – A new Missouri securities rule offers a template for Republican U.S. state officials who want to advance an \u201canti-woke\u201d business agenda even as such ideas struggle for legislative backing.<\/p>

FILE PHOTO: A bale of hay sits wrapped in a material to look like the American flag on a farm in Appleton City, Missouri, U.S., August 11, 2021. REUTERS\/Shannon Stapleton\/File Photo<\/figcaption>

Missouri\u2019s Republican secretary of state, John \u201cJay\u201d Ashcroft, issued a rule on June 1 that requires broker-dealers to obtain consent from customers to purchase or sell an investment product based on social or other nonfinancial objectives, such as combating climate change.<\/p>\n

Ashcroft acted after Republican lawmakers failed to pass a similar measure during the state\u2019s legislative session that ended on May 12, amid infighting over which bills should be prioritized.<\/p>\n

Both the new rule and failed legislation were part of a broader push by Republicans in some U.S. states to limit the growing consideration of environmental, social and governance (ESG) factors by business and investors.<\/p>\n

Many Republican politicians call such concerns \u201cwoke\u201d overreach, using a term the Merriam-Webster dictionary defines as attentiveness to racial and social-justice issues. This year they proposed some 165 pieces of legislation in 37 states to counter ESG investment practices, according to Pleiades Strategy, a climate-focused research and advisory firm.<\/p>\n

But of those 165 proposals, only 22 anti-ESG laws in 16 states were approved this year, Pleiades found. Concerns over costs, bureaucracy and economic fallout led to bills stalling or passing in weakened form even in so-called red states, where Republicans dominate state government.<\/p>\n

Several corporate attorneys said other Republican officials may adopt Ashcroft\u2019s playbook and act on their own. \u201cIn the absence of legislative action, which can be hard to achieve, you\u2019ll see a migration to action via executive or administrative orders and attorney general opinions,\u201d said Beth I.Z. Boland, a securities litigator for Foley & Lardner in Boston.<\/p>\n

The policy changes pursued by Republicans have yet to put a major dent in ESG as an asset class, as investors take stock of issues like climate change and workforce diversity. Morningstar Direct tracked $2.74 trillion in funds globally that used ESG criteria to evaluate investments or assess their societal impact as of March 31, up from $2.69 trillion a year earlier.<\/p>\n

But the attacks have persuaded some Wall Street firms to change their messaging to avoid controversy. BlackRock Chief Executive Larry Fink said last month he had stopped using the term \u201cESG\u201d because it has become too politicized.<\/p>\n

\u2018NOVEL APPROACH\u2019<\/p>\n

Ashcroft is also running for governor of Missouri on a conservative platform, including a vow in a campaign video to protect residents of the midwestern state from banks that focus on what he called \u201cwoke politics.\u201d<\/p>\n

Ashcroft told Reuters in an interview that \u201can extremely dysfunctional session\u201d prevented the measure in question from advancing through a Senate committee after it passed the state\u2019s House of Representatives. Committee members did not return messages.<\/p>\n

But Ashcroft also said he wanted to take a different tack than in other states with new Republican-backed restrictions like barring certain companies from managing public money.<\/p>\n

\u201cWe think we\u2019ve taken a novel approach that protects people but doesn\u2019t preclude them from deciding what to do with their own money,\u201d he said about the rule he implemented, which is set to take effect at the end of July.<\/p>\n

According to a spokesperson, Ashcroft initiated the rulemaking before the legislative session began, essentially as a backup plan in case lawmakers did not act on the same idea introduced in January.<\/p>\n

Business groups had raised objections including on legal grounds and that the rule would create unnecessary costs and logistical hurdles. \u201cYou can\u2019t get away from the fact that this is a new mandate on employers and the financial industry,\u201d said Dan Mehan, president of the Missouri Chamber of Commerce.<\/p>\n

EXTRA ARROWS<\/h2>\n

Financial executives who so far have avoided the strongest laws worry that the possibility of executive or administrative actions, as in Missouri, gives state officials flexibility to keep up the pressure.<\/p>\n

\u201cThere\u2019s a lot more arrows in the quiver,\u201d said K&L Gates attorney Lance Dial, whose clients include asset managers<\/p>\n

Missouri is one of ten states whose secretaries of state have jurisdiction over securities, according to the nonpartisan national association of these officials who are often known for overseeing elections and business licenses. Of those ten officials, six are Republicans.<\/p>\n

In Wyoming, Secretary of State Chuck Gray has proposed ESG disclosure rules for investment advisers similar to Missouri\u2019s. A public comment period is expected soon.<\/p>\n

Before this year\u2019s legislative wave, examples of Republican anti-ESG efforts included Florida\u2019s chief financial officer and West Virginia\u2019s treasurer withdrawing assets from BlackRock, and Kentucky\u2019s treasurer and attorney general guiding state officials to limit investments in ESG.<\/p>\n

To be sure, Republicans have also passed some notable new anti-ESG laws such as a bill signed by Florida Governor Ron DeSantis prohibiting ESG bond sales. DeSantis, who has been embroiled in a feud with Walt Disney, is seeking the Republican nomination for president.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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