Oklahoma Treasurer Bans Additional Bank From State Business Due to ESG Policy

The Oklahoma State Treasurer added yet another bank to its blacklist of companies that are barred from doing business with the State of Oklahoma due to a “boycott [of] the oil-and-gas industry.”  According to a 2022 law, Oklahoma governmental authorities--including state agencies and local governments--are prohibited from contracting with a company absent a written verification that it does not boycott the fossil fuel industry.  A number of major financial institutions have lost substantial amounts of business as a consequence.

However, this law has also received significant pushback from local governments and administrators of state pension funds, among others, who have objected to the increased cost of doing business in the absence of these blacklisted companies.  Indeed, due to fiduciary concerns, certain Oklahoma state pension funds even invoked certain exemptions to the law. 

It is noteworthy that despite the objections raised by significant local institutions, Oklahoma is continuing its drive to penalize financial corporations that have chosen to avoid financing the fossil fuel industry--and to even expand the number of companies impacted by this ban.  This demonstrates the continued salience of anti-ESG sentiment, and the political gains expected to be reaped by vocal proponents of this program.