Oklahoma Judge Halts Implementation of Anti-ESG State Law

An Oklahoma judge, in a state known for its oil and gas production, has halted a law that prohibited state pension systems from working with certain companies that restrict investment in the oil and gas industry.

Judge Sheila Stinson of Oklahoma County District Court issued a temporary injunction on Tuesday, blocking the law’s enforcement. She determined that retiree Don Keenan, who filed a lawsuit claiming the law violates the state constitution and is too vaguely written, is likely to succeed in his case, as reported by Reuters reported.

This 2022 Oklahoma law is part of a series of Republican-sponsored bills aimed at freeing fossil fuel companies from restrictions imposed by some Wall Street firms due to climate concerns, according to Reuters.

The law would prevent state agencies from investing with financial companies that boycott energy companies without an “ordinary business purpose” if they engage in “fossil-fuel-based energy” and do not plan to meet environmental standards, as reported by The Hill.

Oklahoma State Treasurer Todd Russ identified BlackRock, Wells Fargo, JPMorgan Chase, and Bank of America as among the 13 prohibited companies on the list, The Hill reported.

Don Keenan, a former president of the Oklahoma Public Employees Association, challenged the law, arguing that it violates the state constitution and free speech rights, The Hill reported.

In her ruling, Judge Stinson indicated that the law seems to be targeting the “political agenda” of financial companies and aiming to support the economic interests of the oil and gas sector, as noted by The Hill.

A statement from Treasurer Russ emphasized his commitment to protecting the financial interests of Oklahoma’s citizens and industries, Reuters reported.

Russ stated, “This ruling will not deter the fight for Oklahomans against activists using ESG [environmental, social, and governance] in the state,” and he is preparing to appeal the decision.

Bryan McGannon, managing director of the sustainable investment organization US SIF, expressed that the judge’s action demonstrates that anti-ESG laws do not serve the best interests of beneficiaries.

“Financial professionals should have the freedom to make the best investment decisions for their beneficiaries without interference from partisan legislation,” McGannon told Reuters.