TOPEKA, Kan. (AP) — Kansas officials won’t be allowed to use environmental, social and governance factors in investing public funds or deciding who receives government contracts because the state’s Democratic governor is allowing a Republican measure to become law without her signature.
Gov. Laura Kelly’s decision Monday came after she vetoed more than a dozen other anti-transgender, anti-abortion and culture war measures approved by the Republican-controlled Legislature. She nixed a bill Monday that would have allowed parents to remove their public school students from lessons or activities that offend them and another measure that Kelly said could have led to prison terms for some people helping immigrants living in the U.S. illegally.
The new anti-ESG law, taking effect July 1, is part of a larger push from conservatives across the U.S. against what they see as “woke” practices pushing liberal climate or diversity goals. At least nine states have enacted such laws; Montana’s GOP governor signed a bill last week, and a measure cleared Indiana’s GOP-controlled Legislature on Monday.
“This bill will ensure that public dollars — particularly our state pension fund — are invested in ways that produce the highest possible returns with the lowest acceptable risk, and that public contracts are awarded to the entities best-qualified to fulfill them,” Kansas State Treasurer Steven Johnson, a Republican elected last year, said in a statement.
Republicans across the U.S. have pushed back as the use of ESG principles has become more prevalent and visible.
Last month, 19 GOP governors issued a statement calling ESG a “direct threat to the American economy, individual economic freedom, and our way of life.” Utah’s Republican state treasurer told a GOP gathering that ESG “opens the door to authoritarianism” and is “Satan’s plan.”
About one-eighth of U.S. assets being professionally managed, or $8.4 trillion, are being managed in line with ESG principles, according to a report in December from US SIF, which promotes sustainable investing.
ESG supporters argued that it represents a better assessment of risk for investors by addressing questions such as whether a worldwide shift toward green energy makes investments in fossil fuels less financially sound.
There also was research released earlier this month by Bain & Company, a global management consulting firm, and EcoVadis, which provides sustainability ratings for 110,000 companies worldwide, including 10,000 in the U.S. It showed evidence that having more women in management, greater employee satisfaction and sustainable supply chains all correlate with stronger revenue growth and higher profitability.
