JEFFERSON CITY — Just days after President Joe Biden vetoed a Republican effort to address so-called woke capitalism, the Missouri House gave initial approval to a bill barring state agencies from adopting social credit scores as a metric in their decisions.
The legislation sponsored by Rep. Michael O’Donnell, a ºüÀêÊÓƵ County Republican, would prohibit the adoption of rules or issuing guidelines regarding climate and social considerations.
The measure also aims to address “greenwashing,†in which companies falsely attempt to promote environmentally friendly projects or products.
“It’s about consumer protections and transparency,†O’Donnell said.
Earlier this week, the president dumped a similar effort approved by Congress that sought to address an economic principle that emphasizes environmental, social and governance factors in investing.
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Environmental factors look at the conservation of the natural world. Social factors examine how a company treats people, including employees and customers. And, governance factors consider aspects of a company’s operations, such as executive pay.
Republicans have argued the concept is an attempt to inject liberal values into financial decisions. Among other issues, they fear that ESG investing could lead to disinvestment in fossil fuel companies.
Democrats said the language in the proposed law was vague and could be misinterpreted by the judicial branch.
“Is ESG defined?†asked Rep. Peter Merideth, D-ºüÀêÊÓƵ. “It’s really a political phrase. What you’re doing is creating very broad language in law.â€
Rep. Sarah Unsicker, D-Shrewsbury, said the proposal could be used to block state government from enforcing environmental rules.
“It prohibits the state from acting in its best interest and in the interest of Missourians,†Unsicker said.
But Rep. Terry Thompson, R-Lexington, a former banker, said no state agencies raised red flags about the proposal.
The issue has made its way from the national campaign trail to state government, which is controlled by Republicans.
Missouri Secretary of State Jay Ashcroft, for example, earlier announced he was implementing disclosure standards for such investments.
“Missourians work hard for their money. And when they invest, it makes sense to have standards in place for financial advisors who want to propagate strategies and agendas that are not purely focused on generating profit for their clients. We just want to make sure the investor is made aware of agendas that could affect their bottom line,†said Ashcroft, a Republican who is positioning himself for a run for governor.
Former Missouri Treasurer Scott Fitzpatrick, who is now state auditor, pulled $500 million out of pension funds managed by BlackRock Inc. in October, saying the asset manager was “prioritizing†environmental, social and governance over shareholder returns.
Current Treasurer Vivek Malek, a Republican, also appeared on the House floor during debate.
The measure needs one more vote in the House before moving to the Senate.
The legislation is .