A ban on green investing has cleared North Carolina’s GOP-controlled legislature as part of a broader Republican crusade against big businesses that champion sustainability and workplace diversity.
The measure, which won final legislative approval Tuesday, bans state agencies from using “environmental, social and governance” standards to screen potential investments, award contracts or hire and fire employees. It also says the state cannot weigh how a company promotes sustainability, engages with its community or structures its leadership to support those goals.
At least two other states — North Dakota and Idaho — have already enacted laws banning such criteria. And elected officials in several other red states have derided them as “woke” or proposed similar policies to stop investors who contract with states from adopting them.
NORTH CAROLINA SENATE ADVANCES BILL BANNING ECONOMICALLY TARGETED INVESTMENTS
The Senate voted 29-18 along party lines on Tuesday after the House passed the bill with veto-proof margins in May. It now heads to the desk of Democratic Gov. Roy Cooper, who could sign it, veto it or allow it to become law without his signature.
Cooper, who has not indicated whether he will veto the bill, has only picked fights with the legislature’s Republican supermajority on a few contentious issues this session and has been unable to block any bills.
The North Carolina Senate leader speaks on May 4, 2023, in Raleigh. The Senate gave final approval Tuesday to a bill that would ban businesses from making economically targeted investments. (AP Photo/Hannah Schoenbaum, File)
Sen. Dave Craven, a Randolph County Republican and primary sponsor, said the bill “ensures that our pension fund is solvent” by requiring the state to prioritize financial considerations over social or environmental factors.
Effective as soon as it becomes law, it would require the state treasurer to solely consider factors expected to have a material effect on the financial risk or financial return of an investment. State Treasurer Dale Folwell, a Republican candidate for governor in 2024, supports the bill.
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But several Democrats in the House and Senate raised alarms throughout the legislative process that the bill does not clearly lay out the specific criteria it prohibits.
Democratic Sen. Graig Meyer of Orange County worried it would confuse state agencies and lead some of the state’s largest employers to believe they’re being discouraged from making their own decisions about how to run their business.
“While we’re trying to build a strong business and employment climate, I do not think that the General Assembly should be hostile to those interests in the bills that we pass,” he said Tuesday during floor debate.