- While SB 554 does not explicitly mention environmental, social, and governance (ESG) practices, the protections for farmers are broadly similar. ESG is explicitly mentioned in companion bill HB 62.
On Wednesday, the North Carolina Senate passed the Farmers Protection Act in a 36-11 vote. This bill, sponsored by Sens. Buck Newton, R-Wilson, and Lisa Barnes, R-Nash, is a companion bill to HB 62.
“It is unlawful for a bank to deny or cancel its service to an agriculture producer based, in whole or in part, upon the agriculture producer’s greenhouse gas emissions, use of fossil-fuel derived fertilizer, or use of fossil-fuel powered machinery,” reads the bill.
Newton explained on the Senate floor yesterday that this bill prohibits financial institutions from discriminating against farmers who use fossil fuels or fossil fuel-based fertilizers. According to Newton, the bankers are neutral, and he knows of no outright opposition to the bill.
While SB 554 does not explicitly mention environmental, social, and governance (ESG) practices, the protections for farmers are broadly similar. ESG is explicitly mentioned in companion bill HB 62.
“HB 554 is a necessary safeguard against the growing trend of ESG-driven discrimination that unfairly targets agriculture producers,” Kelly Lester, policy analyst for the Center for Food Power and Life at the John Locke Foundation, told the Carolina Journal. “Farmers are being penalized not for breaking laws, but for using lawful and efficient practices like fossil fuel-powered equipment and fertilizer. Denying them access to basic banking services over these choices is not only unjust—it threatens our food supply and rural economies. This bill ensures that North Carolina’s farmers are treated fairly and protected from ideological financial gatekeeping.”
ESG practices promote environmental sustainability and purported societal and governance benefits, but climate regulations often drive these practices. Experts have indicated that ESG frameworks frequently pressure investors and financial institutions to avoid financially backing high-carbon projects such as livestock farming. Capital is diverted away from these farms, especially cattle farms, as ESG activists target such farms due to their methane emissions.
But farmers cannot modernize their operations, adopt sustainable practices, or expand their businesses without sufficient capital. ESG investing directs capital toward high-scoring companies and projects that meet specific environmental, social, and governance criteria. According to experts, these criteria encourage businesses to adopt environmentally sustainable practices, such as promoting diversity and enhancing governance structures.
After passing a Senate vote, the bill was sent by special message to the House and was referred to the House Rules Committee on Thursday.