Model legislation targets banks that divest from fossil fuel companies
The right-wing American Legislative Exchange Council, otherwise known as ALEC, is pushing a new piece of anti-fossil fuel divestment legislation after a version of the bill was passed in Texas.
Texas this year paved the way for the GOP on several fronts, from passing a new "fetal heartbeat" abortion law to a restrictive election law. The state also buoyed a bill that would require state entities to divest from companies that choose to no longer do business with fossil fuel companies. It was signed into law in June.
At least a dozen similar bills to the Texas law were filed in 2021 legislative sessions in a handful of states, according to the Texas Tribune, and experts anticipate the trend will grow in 2022.
"Oil and gas is the lifeblood of the Texas economy," Texas state Rep. Phil King said during a floor discussion of the state's bill in May, according to the Tribune. "In the world of capital, there's a movement to deny funds to businesses that will not sign on to extreme anti-fossil fuel policy."
ALEC, which drafts and streamlines legislative priorities for lawmakers in statehouses across the country, approved model legislation similar to the Texas law -- called the Energy Discrimination Elimination Act -- at its December meeting.
In an email obtained by the Center for Media and Democracy, a top executive for a state-level group that pushed the anti-divestment bill in Texas wrote that "at the ALEC Committee meetings you'll have the opportunity to push back against woke financial institutions that are colluding against American energy producers."
Modeled after anti-BDS legislation supported by ALEC that passed in Texas in 2019, the fossil fuel bill is touted as sending "a strong message that the states will fight back against woke capitalism," the executive wrote in the email. The controversial Boycott, Divestment, Sanctions (BDS) movement uses financial pressure to "end international support for Israel's oppression of Palestinians."
ALEC's Task Force on Energy, Environment and Agriculture voted unanimously in support of the fossil fuel bill language, according to news reports, but it appears to have been removed from ALEC's website.
ALEC did not respond to a request for comment.
"It's likely more political than anything else," Hana Vizcarra, a senior attorney at EarthJustice, told ABC regarding ALEC's efforts on the energy front. "I think that the financial sector is waking up to the reality of impacts of climate change on their investments, their lending, how they go about their business… these kinds of efforts appear to just be pushing against the tide of reality."
Banks are starting to shift their investments as they assess the risks of climate change, Vizcarra said, and that doesn't necessarily equate to a boycott. In 2020, Larry Fink, founder and chief executive of investment behemoth BlackRock, wrote to shareholders that the firm would make climate change "a defining factor" in its investment strategy.
"It's largely pushing against the private sector and business community at the moment," she said. "But they may find that they're actually hindering their own business climate through these efforts."
The public is getting on board with holding companies responsible for climate change.
In a September public opinion poll conducted by organizations at Yale and George Mason universities, 41% of Americans said that over the next 12 months, they intend to reward companies that are taking steps to reduce global warming more frequently than they do now.
Another 41% said they intend to punish companies that are opposing steps to reduce global warming more frequently than they do now. The poll found that at least half of Americans say industries should be doing "more" or "much more" to address global warming. And 70% say fossil fuel companies should be doing more.
Progressives, meanwhile, are introducing legislation that would require government entities to divest from fossil fuel companies.
And in response to reporting about the energy discrimination bill, 38 climate advocacy organizations wrote a letter to state treasurers and comptrollers urging them to push back against the legislation.
"Despite what ALEC and other politically-motivated organizations may claim, the global energy transition is underway," the groups wrote. "This is a market reality, not a political opinion."
