Last month Pleaides Strategy published a report titled “2023 STATEHOUSE REPORT: Right-Wing Attacks on the Freedom to Invest Responsibly Falter in Legislatures.” This report is based on a massive research effort which tracked 165 anti-ESG bills introduced by Republican lawmakers in 37 states. Obviously, some of these were introduced in purple and even Blue states so didn’t get very far. The report has received wide press coverage including E&E News, The Guardian, Reuters, and S&P Global.
Fortunately for the state-level anti-ESG movement some progress was made in 23 states. Unfortunately for this movement, progress was very uneven. The report has some summary statistics but Frances Sawyer, the founder of Pleaides Strategy, kindly provided me with an update. They are tracking this live. Here is a quick summary of the results as of July 27, 2023 (with my comments in italics). You can find all the delicious details in this spreadsheet.
• At least 165 distinct bills (including 9 resolutions) were introduced in 37 states. (an average of 4.5 per state 😍)
• 84 bills are dead, across 23 states: (A disturbing 50 percent mortality rate 💀.)
· In 18 states where legislation was introduced, no laws passed. 10 of these states are controlled by Republicans. (Looks like there was some infighting between the MAGA ones and the sensible ones.)
· 3 bills were vetoed by the governor in Arizona. (Kari Lake wouldn’t have done this 😉. )
· 42 bills that did not pass will carry over into the 2024 legislative session. (Hope springs eternal 😄.)
• 22 bills and 6 resolutions were approved by state governments: (28/165=17 percent)
• 11 active bills are pending. Five have not had committee hearings.” (Thinking positive here, 40/165=24 percent)
My take on this is that after countless hours of legislative effort, all funded by state taxpayers who these bills will hurt, the results have been pretty paltry. But maybe I’m being unfair by looking at this too narrowly. There’s the sheer entertainment political theater aspect to all this which is good for winding up the base (who, for the most part, has no idea what this is all about) and throwing some shade at asset managers and the libs (liberals, not libertarians).
Since Sawyer is much closer to the data than I am and essentially followed this on a real time basis, I asked her what her take on all this activity was. She explained: “Our research shows that the banking associations, chambers of commerce, and financial officers typically aligned with the Republican agenda called out the high costs, legal confusion, and bad faith attacks in these proposals. This was no easy culture war win. Indeed, I see no winning in sight. Not for the proponents of these bills, who saw most of them die or significantly watered down. Nor any victory for the businesses, taxpayers, workers, and retirees who must bear the brunt of the costs.”
While aggregate performance is interesting, it’s more illuminating to break it down by state. Here’s the number of bills by state that were passed by at least one legislative chamber in 2021, 2022, and to date in 2023. But I’m more of a results-oriented kind of guy so I wanted to better understand the varying degrees of success and here’s the count for 23 Red states:
· 0—Arizona, Georgia, Iowa, Missouri, Ohio, South Carolina, and Wyoming (which I’ve written about)
· 1—Alabama, Indiana, Kansas, North Carolina, Montana, New Hampshire, Oklahoma, and Tennessee
· 2—Kentucky, North Dakota, Texas, and West Virginia
· 3—Arkansas, Florida, and Idaho
· 4—Utah
Clearly there are only a few winners but mostly losers. Invoking the color spectrum, a simplistic analysis would code these results as follows: 0=Blue, 1=Green, 2=Yellow, 3=Orange, and 4=Red. By this primitive methodology, there is only one truly Red state in this bunch. But being the highly educated man I am (two degrees from MIT and two from Harvard) I know a more sophisticated approach must be used to evaluating just how red a Red state truly is.
Doing this would require even more detailed data than is available in the above spreadsheet. For help here I turned to Connor Gibson, an opposition research consultant and co-author on the report. Going into even more painstaking detail than is provided in the spreadsheet, he created 10 factors for evaluating each state’s legislative activity shown in the table below.
This list only includes bills that advanced through at least one legislative chamber from 2021-2023. Legislative resolutions are not included. The list is focused on bills targeting ESG in particular—similar bills that focused on deterring boycotts against Israel or forcing investors to favor weapons manufacturers are not included.
Factor Scoring Table
I asked Connor just how painful this exercise was and what he learned from it, and he said, “Bob, after six months of tracking this stupid trend, I’m ready to eat my own face. Republican politicians are blowing it on the one thing they pretend to be the best at—the money. It would be funny if it wasn’t a huge waste of time and funds that could be spent solving real problems.”
Connor and I then created the table below.
Based on these scores, Connor and I then invoked inspiration from the color spectrum to produce a Red Index Assessment for evaluating the redness of each state.
The results ain’t pretty. Only two of these 23 states can legitimately call themselves Really Red. Another eight orange states still have the potential to achieve Red State Status. Their legislators and governors need to work harder 😅. Of the nine yellow states, West Virginia and Arkansas have some hope of getting to orange but Missouri and Idaho risk slipping into the group of green states. Here scores are so low that they are at risk of getting letters from red and orange state attorneys general telling them to step it up or risk being thrown out of the Red State AG Letter Writing Club. There is virtually no hope for blue Georgia and Tennessee. They are a Below the Mason-Dixon Line Embarrassment (BMDLE).
I’m sure these results are very disappointing to most of these 23 s0-called Red states. But having been a professor for 44 years, I’ve learned that a proper grade must be assigned without any fear or favor. I’ve also learned that most students are eager to improve. For them to do so, honest but constructive feedback must be provided. In my next piece, I will do this for all 23 states. While it would be more appropriate to furnish this information privately and individually, I don’t have the necessary contact details so I’m hoping I’ll be forgiven for simply putting this in the public domain in hopes it will be found and found helpful.
Read the full article here
