On the last day of the Alabama legislative session, Gov. Kay Ivey signed into law a bill that would ban state and local governments from entering into contracts with firms that engage in economic, social and governance investing policies.
Senate Bill 261, which was sponsored by Sen. Dan Roberts, R-Birmingham, would prohibit state and local governments, with a few exceptions, from entering into contracts unless there are provisions regarding economic boycotts. The bill would also allow the state attorney general to investigate and enforce any violations of the ban.
The new law will apply only to contracts reached after Oct. 1.
Republicans say that these “woke capitalism” investments push an agenda while ignoring a pension fund’s fiduciary duty to make as much money as it can from its investments. Democrats say incorporating values such as diversity, equity and inclusion, and climate change into investments is needed.
“No matter how much Corporate America and the national media want to push their social issue of the day on folks, the state of Alabama will continue protecting both our values and our businesses,” Ivey said in a news release. “Alabama citizens, in no way, shape or form, want ESG influencing business in our state, and this legislation most certainly sends that message. Alabama – where businesses do business and government serves her people! We call it common sense.”
Other state legislatures are banning contracts with firms that use economic, social, and governance criteria for investments and boycott, for example, fossil fuel producers and gun makers. Louisiana’s bill didn’t make it out of committee, while Oklahoma and Tennessee have passed similar legislation this session.
Republished with the permission of The Center Square.
