This summer, West Virginia State Treasurer Riley Moore published a list of five financial institutions that he has deemed ineligible for state banking contracts due to their environmental and social activism. The list includes Blackrock, Wells Fargo, JP Morgan Chase, Morgan Stanley, and Goldman Sachs. And North Carolina State Treasurer Dale Folwell said he supports Moore and is keeping an eye on activist investors himself.

“Treasurer Riley Moore is involved in this because of the nature of his state’s economy,” said Folwell in an interview with Carolina Journal. “He’s not doing this because he can, but because he should.”

Many of these companies are penalizing investments that operate in the coal industry, using their “ESG score” as justification. ESG stands for environmental, social, and governance, and is a recent trend in investments where companies are chosen based on how they align with left-wing social and environmental priorities. The coal mining industry supplies more than 11,000 jobs to West Virginia. 

“Any institution with policies aimed at weakening our energy industries, tax base and job market has a clear conflict of interest in handling taxpayer dollars,” said Moore in a press release. “Each financial institution placed on the Restricted Financial Institution List today has published written environmental or social policies categorically limiting commercial relations with energy companies engaged in certain coal mining, extraction or utilization activities, rather than considering the financial or risk profile for each company. These policies explicitly limit commercial engagement with an entire energy sector based on subjective environmental and social policies.”

Moore’s decision comes as state leaders become more concerned with financial institutions making investment decisions based upon a company’s ESG stance. Florida Gov. Ron DeSantis has been vocal about this practice by financial institutions saying that it is “the politicization of the economy.” 

“It benefits the largest, most powerful corporations, and it disadvantages the small and medium-sized businesses,” said DeSantis at a press conference in Tampa. “And so, this is not something that is empowering, kind of, the little guy. You know, this is something that is, in many respects, crushing the little guy.”

Folwell said he has also noticed activism by those managing North Carolina’s investments and is working to counter it.  

“Just because somebody manages money for our pension plan doesn’t mean they own the stocks and can spew their own social beliefs on something they don’t own,” said Folwell. “We are working to remove their proxy, so they can manage the stocks but not vote on the stocks.

“I work closely with Treasurer Riley Moore,” Folwell continued. “We all have a responsibility and loyalty to the people of our state, and he would not do anything, nor would I, regardless of how we felt on any particular topic, that would hurt our citizens. I think that when he made this decision he already had other ways of getting West Virginia’s needs with no financial detriment to the taxpayer.”

Although North Carolina doesn’t produce coal, according to Folwell, ESG policies can still affect North Carolina’s energy and economy.

“We’re spending about $13 billion a year for natural resources to fund our economy in North Carolina, and a major percentage of that is coal,” Folwell said. “Even though we’re not a coal producing state, we’re highly impacted by this.”

Instead of allowing activist investment firms to leverage state pension funds for their own goals, Folwell said state’s could use them to help struggling North Carolinians.

“We need to redefine what these words [ESG] mean,” he said. “Right now, with inflation as high as it is, the ‘E’ needs to stand for energy independence. That is the single best thing that we can do for lower fixed-income people in North Carolina; to get toward more supply of energy that results in lower costs. We have enough water, enough manure, enough wind, and enough intelligence that we need to be focused on not being so vulnerable to energy shocks whether they come from Washington DC or the Middle East. We need to think through how the average citizen in this state can be more protected from the energy volatility that they have experienced this year. We need natural gas in eastern North Carolina.” 

According to Fox Business News, Morgan Stanley responded to West Virginia’s barring by saying, “Morgan Stanley does not boycott fossil fuel energy companies. We remain committed to our clients (and employees) conducting business in West Virginia.” 

But Moore and other Republican state treasurers appear ready to continue the fight against ESG policies. 

“We’re not going to pay for our own destruction; we’re not going to subsidize that,” said Moore during a Fox Business interview. “They have weaponized our tax dollars against the very people and industry that have generated them to begin with. That is why we’re pushing back against this ESG movement.”