OP ED: Banking Bill Essential to Fight Woke Capitalists

Chris Hamilton, President & CEO
WV Coal Association
(304) 342-4153

President Joe Biden and his liberal allies have not hidden their desire to use any means necessary to enact their radical Green New Deal social agenda.

Biden has nominated a slew of agency appointees who have openly said they would use their agency power to enact rigorous anti-fossil fuel climate policies. Meanwhile, his Special Presidential Envoy on Climate, John Kerry, has reportedly been pressuring big banks to cut off financing and divest from coal, oil, and natural gas companies. We are in the middle of an energy crisis in this country, and one needs only to look to what’s going on right now in Europe to see the dangers of what could happen when you let radical social activists cut off reliable sources of energy.

West Virginia Senate Bill 262 allows the State Treasurer to stop giving taxpayer business to banks and financial institutions engaged in boycotts of fossil fuel industries. A critic recently stated this was an abandonment of conservative principles and free-market capitalism. Nothing could be further from the truth. In fact, Senate Bill 262 is about using our state’s power as a banking customer as a means of saying we’d prefer the free markets to remain free. Senate Bill 262 was championed by State Treasurer Riley Moore and Senator Rupie Philips (Logan) and was passed by a 34-1-1 or 91% margin by the State Senate and by an overwhelming 80-14 vote in the House of Delegates.

One important clarifying point needs to be made here about this legislation. There is a protection for a “reasonable business purpose” for banks. What this means is that if a bank denies a loan to a coal company, for example, because it would be a bad business decision, they will NOT be put on the list of denied financial institutions. This legislation is about banks that have a policy of prohibiting access to capital to fossil fuel companies, not the denial of loans in the regular course of business.

A disturbing trend has been brewing in corporate America in recent years, centered around the adoption of corporate Environmental, Social, Governance (ESG) policies. Instead of making business decisions based strictly on financial factors and investment risks, these principles take other more subjective factors into consideration. The problem lies in how a corporate board defines these ESG principles. For some, it might mean just increasing the amount of investment in new, less-carbon-intensive technologies. For others, it’s a complete divestment from anything coal, oil, and natural gas related.

In recent years, radical social activists and liberal policymakers have increased their presence on corporate boards to expand ESG principles to the extreme. Now, in order to do business with these firms, you not only have to pass financial muster, but you also must agree with the board’s preferred political outcomes as well. This new brand of “woke capitalism” is ruining American business and is right now targeted at the companies responsible for thousands of jobs and a significant portion of the tax base here in West Virginia.

Senate Bill 262 is using our collective state power as a market participant – not a market regulator – to respond to this. If a company openly says it will no longer do business with our people or the companies doing business in our state, then we should be able to take that into account when we decide which banks get our peoples’ business.

Additionally, the bill is a recognition of corporate fossil fuel policies. A significant amount of West Virginia’s tax revenue comes from the fossil fuel industries, be it severance taxes, taxes from natural gas royalties, or income and sales taxes paid by our hard-working coal miners and natural gas workers. If a company says it wants to stop doing business with fossil fuel industries, then why should they be awarded a contract to handle taxpayer funds derived from those very businesses? Ending business with them would actually help accomplish their ESG goals.

Senate Bill 262 further recognizes that a bank that states it will stop doing business with fossil fuel companies has an inherent conflict of interest in doing business with a state that receives a large portion of tax revenue and economic activity from those very industries. Coal, oil, and natural gas have been surging to new highs of late, making the firms that do business in these industries ripe for new investment. The only thing holding this back is the artificial, radical ESG policies forced on financial institutions by liberal activists.

We’re not asking for preferential treatment of these industries; we simply want them to be judged just like any other investment. Senate Bill 262 is an effort to push back against the woke capitalists who are trying to distort our free markets, and to ensure our coal, oil, and natural gas companies and jobs are treated fairly by financial institutions.

Gov. Justice should sign this bill as soon as possible.