The Biden Administration’s Radical Climate Agenda—And How States Can Fight Back

Energy drives the American economy. It keeps the country moving—literally. It heats and cools our homes, produces everyday goods, and puts food on the table. 

Nearly 80 percent of American energy consumption comes from fossil fuels. There have been many promises of “green” energy, but these alternative sources simply aren’t keeping up with demands and needs of the modern world. The reality is that fossil fuels are in high demand—and here to stay.

Regardless, the Biden administration is taking steps to abandon the use of fossil fuels and shift to “green” alternatives, and “politically motivated” corporate leadership is joining the effort. The unspoken plan is to make fossil fuels so expensive that they’re no longer a viable option. 

New research from the Foundation for Government Accountability exposes how the Biden administration is waging an all-out war on the fossil fuel industry, using environmental, social, and governance (ESG) criteria to intentionally make fossil fuels cost prohibitive.

What is ESG?

Using ESG criteria, climate alarmists and corporate leaders are directing capital away from the fossil fuel industry, slowly suffocating this important industry under the banner of “social responsibility.” 

The Biden administration and agenda-driven corporate leaders are teaming up to leverage the power of the federal government, through its rulemaking ability, and the resources of financial firms to cut off access to capital and bankrupt the fossil fuel industry. Likewise, insurers are moving forward with plans to cut the industry off from insurance coverage. So-called “ESG scores” claim to measure how much “environmental risk” a company’s operations incur, and increasingly, government regulations are allowing those scores to factor into financial decisions.

Why it’s a problem

ESG is truly the latest trend in investing—roughly one-third of professionally managed assets in the United States now adhere to the criteria. 

This should strike Americans as unsettling because ESG has proven time and again to be a serious problem not only for individual investors, but also for entire economies in nations that have prioritized it. FGA’s research explores how… 

• Instead of maximizing investor returns, ESG is “virtue signaling with other people’s money.” ESG funds are lagging in the S&P 500—it’s not surprising investments don’t perform well when the goal is pursuing a political agenda, not high returns. 
• Big government and big business are teaming up to choose winners and losers in the economy.This is hardly free enterprise at work—rather, it costs jobs in fossil fuel industries and industries that depend on fossil fuels, like transportation. 
• ESG diverts capital from fossil fuel companies. This leads inevitably to higher fuel and consumer prices and threatens energy crises and shortages because “green” energy cannot keep up with demand.  

The way ESG is shaping into a “backdoor” way to implement unpopular ideas should also concern Americans. Traditionally, when an unpopular policy does not gain public support or the support of Congress, the policy fails to be adopted. However, ESG criteria provide a new way for the federal government to implement unpopular policies through the collective power of activists on Wall Street and government bureaucrats. The implementation of the ESG criteria has the potential to alter the lives and livelihoods of millions of Americans—in the same way a law change might—but without the input of the people affected. It is an end-run around the normal legislative process through which voters are guaranteed a say in policymaking through their elected representatives.

What policymakers can do

The Trump administration issued an executive order limiting the ability of corporations to discriminate against certain industries and issued a rule requiring banks to provide fair access to bank services, capital, and credit. But unsurprisingly the Biden administration immediately began undoing these rules.

Now, it’s up to the states to fight back. State leaders can push back against this kind of corporatism in a few ways. One way is for state treasurers to refuse to do business with firms that discriminate against certain industries. In West Virginia, the treasurer must publish a list of financial institutions that are boycotting energy industries—the state treasurer is authorized to refuse to engage in state business with them. Kentucky, Oklahoma, and Texas have also begun compiling lists of financial firms to avoid on the grounds of their use of ESG criteria, as well.  

In addition, states can also follow the lead of the attorneys general of Arizona and Texas who have asked that financial firms stop pursuing ESG, demanding accountability for financial firms’ use of retirement plans, pension funds, and investments. More than a dozen other attorneys general followed suit.

Regardless of the Left’s outrageous climate agenda, fossil fuels are a necessity—and cutting off their access to capital will only hurt the average American investor and consumer. 

Read the full research paper here.