Idaho officials continue to push back against federal efforts to mandate “ESG” reporting requirements and use the information to evaluate the creditworthiness of government entities and private firms.
ESG stands for “environmental, social and governance.” The term refers to everything from a state or company’s policies regarding climate change and carbon emissions to their stance on social justice issues and their support for diversity in hiring. ESG ratings have become an increasingly popular marketing tool for private firms that want to portray themselves as socially responsible. Supporters say companies that demonstrate a commitment to ESG issues are better managed, generate greater brand loyalty and attract a better workforce — meaning they ultimately provide a greater return on investment. But opponents see ESGs as a backdoor scheme to pressure companies into supporting “liberal” causes.
Idaho joined West Virginia and 13 other states last year in warning financial institutions that they’ll take “collective action” against lenders who refuse to provide financing for companies based on subjective ESG evaluations. Additionally Idaho lawmakers passed legislation earlier this year prohibiting the state pension plan from using ESG characteristics to make investment decisions, if doing so conflicts with its fiduciary responsibility to look out for the best interests of plan beneficiaries.
And on Tuesday, Gov. Brad Little joined 15 other Republican governors in urging the Securities and Exchange Commission to rescind a recently proposed rule requiring publicly traded firms to make detailed disclosures about climate change risks and greenhouse gas emissions. Idaho State Treasurer Julie Ellsworth and U.S. Sen. Mike Crapo will host an educational roundtable regarding ESGs next week. (Lewiston Tribune)
