Without legislative intervention, agriculture in North Carolina, which makes up one-sixth of the state’s economy, will continue to be gravely harmed by a complex set of standards known as ESG. The agriculture industry is the backbone of North Carolina, but radical, poorly thought-out policies could bring financial ruin to the farmers who feed our state.
Under the previous presidential administration, federal regulators and international interest groups promoted ESG standards governing a wide range of economic activities. America’s farmers have too often taken on all of the negative impacts of these regulatory burdens, and it is past time for North Carolina to protect our farmers from ESG-promoting busy bodies.
ESG is short for Environmental, Social, and Governance initiatives. ESG ratings are used by both regulatory agencies and financial-service agencies in their respective business operations. These ratings are developed by various agencies to promote their politically charged concepts of “sustainability.” What that tends to mean in practice is farmers and energy producers are saddled with regulatory burdens that make doing business impractical, and often impossible.
The environmental goals of ESG ratings put farmers at a steep disadvantage in being able to acquire much-needed capital loans for expansion. These unrealistic expectations have included converting farming equipment to green technology, reduction of greenhouse gas emissions, and modified fertilizer usage. Each of these requirements have significant cost implications and create burdens for farmers in a market with volatile profit margins and unpredictable weather patterns. It is becoming increasingly difficult for farmers to turn a profit while remaining compliant with ESG standards.
Beyond regulatory burdens, some financial institutions have bought into the United Nations-backed Net Zero Banking Alliance, which is actively discouraging investment in livestock production. The people who feed America shouldn’t be prevented from doing business just because of their livestock’s methane emissions. This issue is so vital to the future of our country, 13 state agriculture commissioners, including NC’s Steve Troxler, recently sent a joint letter to the major banks expressing concerns about the impact of their radical commitments to decarbonization.
To support our North Carolina agriculture industry and keep our people fed, North Carolina Reps. Neal Jackson, R-Moore; Jennifer Balkcom, R-Henderson; Jimmy Dixon, R-Duplin; and Karl Gillespie,R-Macon; have filed, House Bill 62, the “North Carolina Farmers Protection Act.” HB 62 prohibits banks from denying or canceling financial services to a farmer based on ESG ratings. The goal of this bill is for banks to put the emphasis on a farmer’s credit score, and not his carbon score.
The Farmers Protection Act is a step in the right direction for North Carolina. Rather than using ESG ratings that have proven to be disastrous on the international stage, banks in our state should return to evaluating loans based on financial indicators.