Bankers say ‘environmental, social and governance’ proposal is too broad, needs to be amended
LINCOLN, Nebraska (Nebraska Examiner) — A proposal aimed at preventing the Nebraska State Treasurer from using public funds for “social and political” purposes prompted complaints Monday that it was too vague and interfered too much with banking decisions. .
Robert Hallstrom of the Nebraska Bankers Association said that banks have traditionally been free to “lending, investing, and generally doing business with any activity or entity that is legal.”
Hallström told the Legislative Assembly Committee on Banking, Commerce, and Insurance that Bill 67 would require the state treasurer to attempt to control the bank’s operations.
He introduced amendments to the bill, which were discussed with the bill’s spokesman, State Senator Julie Slama of Sterling and State Treasurer John Murante, that Hallstrom said would remove objections from the bankers’ association and make it clear that state treasurers were not directing investments. bank policies.
ESG is a national issue
LB 67 is a local salvo in a nationwide battle over whether financial firms should invest public funds with “environmental, social and governance” goals in mind. Should, for example, investment be shifted to green energy rather than fossil fuels due to concerns about climate change, and whether a company’s diversity policy should be considered, not just its return on investment.
Conservative critics of ESG, including Murante, call it “awakening capitalism” and contrary to the goal of maximizing returns on investment. ESG advocates argue that issues like climate change are real and should be addressed.
Concerns about ESG have prompted some conservative states, including West Virginia, Texas and Florida, to pass laws blacklisting firms that consider ESG when investing. In December, then-Nebraska Attorney General Doug Peterson released a report warning that the ESG was a threat to democracy.
The issue has also drawn backlash from 13 state treasurers, including those in Colorado, Wisconsin and New York, who say such anti-ESG bills limit access to large financial firms and ultimately harm taxpayers. The Peterson Report has been criticized by some as “political theatre”.
State Senator Julie Slama (Courtesy of Unicameral Information Office)
Under LB 67, the Treasurer of Nebraska will be prohibited from depositing public funds that are “used by financial institutions for social or political purposes or purposes.”
Slama, chairman of the Business Committee, said taxpayer dollars “should not be used to advance political or social programs.” She said she wanted neutrality among the treasurers.
Murante, the former president of the conservative treasury organization that claims ESG is “awake,” said lawmakers don’t have to worry about him using funds for ESG purposes. But some state treasurers in other states are “openly working” on investment plans using ESG considerations, he said, and the bill was needed to prevent future Nebraska treasurers from doing the same.
“While I don’t think we have a problem in Nebraska today, it’s clear that there is growing pressure on state treasurers across the country to make political rather than financial decisions,” said Murante, the former head of the state’s Treasurers. Foundation.
‘Why are we doing this?’
Lincoln Senators Eliot Bostar and George Dungan said the bill seemed too vague and too broad and feared it could have some unintended consequences.
State Senator Eliot Bostar of Lincoln (Paul Hammel/Nebraska Examiner)
Bostar questioned why the bill was needed at all, given Murante’s claims that it would not affect him and that the treasurer already had the power to end banking relationships that were becoming “politicized”.
“Why are we doing this?” the state senator asked.
Murante said it was a proactive “belt and suspenders” approach that would make this clear in the law.
“We must proactively and aggressively protect these (government taxpayer) dollars,” the treasurer said. Murante said his office currently has checking accounts with 52 banks.
North Platte Senator Mike Jacobson, a banker, noted that the funds deposited with the bank are not segregated, so it would be difficult to separate the government’s deposits from those of others.
Slama said negotiations on LB 67 are ongoing.
The banking committee did not take any action on the bill after the public hearing.
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