Wyoming’s investment leaders are raising concerns about the potential impact of proposed legislation that seeks to restrict the use of environmental, social, and governance (ESG) criteria in state investments.
The bill, introduced by the House Freedom Caucus, could lead to significant financial losses and affect the state’s ability to manage pensions and other public funds, according to state officials.
The legislation, sponsored by Rep. Christopher Knapp, R-Gillette, aims to limit investments that promote ESG goals, such as environmental sustainability, social responsibility, or corporate governance reforms. State officials, including Treasurer Curt Meier and Chief Investment Officer Patrick Fleming, warn that the bill could harm Wyoming’s financial returns and make it more difficult to attract skilled money managers.
“We are likely to lose a significant portion of our investment staff,” Meier told the House Minerals, Business and Economic Development Committee.
He expressed concerns that the bill could lead to a walkout from key personnel, leaving Wyoming without experienced managers to handle its substantial investment portfolios.
The bill’s impact is particularly concerning for Wyoming’s pension funds, which are managed by the Wyoming Retirement System (WRS). WRS has projected that the bill could result in a loss of up to $1.1 billion in future revenue over the next three years if it were enacted in its original form. These losses could affect the financial stability of the state’s pension system, which supports teachers, firefighters, law enforcement, and other public employees.
Despite these warnings, Knapp has worked to amend the bill to address some of the concerns raised by Meier and other investment officials. The new version of the bill removes some of the more restrictive language, such as prohibiting investments in companies that promote goals like lowering carbon emissions or supporting abortion access. However, the bill still prohibits investments in funds that prioritize environmental, social, or governance objectives over financial returns.
The Freedom Caucus has been vocal about its opposition to ESG investing, particularly in the context of the energy industry. They argue that large investment firms like BlackRock have been promoting policies that disadvantage fossil fuel industries, which are vital to Wyoming’s economy. Knapp and other supporters of the bill argue that the legislation is necessary to protect the state’s investments from being influenced by political or ideological agendas.
The amended bill has been advanced by the House Minerals Committee with broad support, though some members, including Reps. Martha Lawley and J.T. Larson, have called for more public input before moving forward. Despite these objections, the bill has been fast-tracked as part of the Freedom Caucus’ legislative agenda.
With input from Wyo File, Cowboy State Daily, and Casper Star Tribune.
