Oklahoma Attorney General Gentner Drummond recently announced the termination of the legal team hired by State Treasurer Todd Russ to defend a state law prohibiting state pension systems from contracting with companies that limit investment in the oil and gas industry. This decision follows a state judge’s temporary injunction blocking the law’s enforcement, finding it likely unconstitutional and vaguely written.
Drummond criticized the inability of the Plaxico Law Firm, chosen by Russ, to secure a favorable ruling. He also removed Russ from any decision-making authority over the legal defense, citing the need for a more competent approach. Drummond expressed regret for initially allowing Russ to select his own counsel, emphasizing that future decisions would prioritize legal efficacy over professional courtesy.
Russ defended his actions, stating he had requested Drummond’s office to defend the law initially but was rebuffed. He maintained that his decision-making authority should remain intact and indicated his intention to appeal the court ruling.
Oklahoma’s 2022 law, one of many Republican-backed ESG bills nationwide, aims to protect fossil fuel investments from climate-driven financial policies. Despite these efforts, major financial institutions have not fully divested from the oil and gas sector, with some even reducing their involvement in pressure groups against major emitters.
The law specifically prohibits state agencies from engaging with financial firms that limit fossil fuel investments and mandates the state treasurer to maintain a list of such companies. Last year, Russ listed major firms like BlackRock, Wells Fargo, JPMorgan Chase, and Bank of America, highlighting the ongoing tension between state policies and corporate ESG strategies.
Drummond’s takeover of the case underscores a broader conflict within Oklahoma’s government regarding the defense of fossil fuel interests. This development also reflects the national debate over ESG policies, where states with significant fossil fuel industries push back against financial institutions’ climate-driven strategies.
The controversy is part of a larger trend of states enacting laws to counteract ESG policies perceived as detrimental to their economic interests. The outcome of this legal battle in Oklahoma could set a precedent for similar conflicts across the United States, influencing the balance between state regulations and corporate investment strategies in the fossil fuel sector.
This situation underscores the complexities of implementing and defending anti-ESG legislation, particularly in states heavily reliant on the oil and gas industry. The resolution of this case will likely have significant implications for the future of ESG policies and the fossil fuel industry in Oklahoma and beyond.
Drummond’s decisive action marks a critical juncture in the state’s approach to defending its anti-ESG law, with the Attorney General now directly overseeing the legal strategy. As this case progresses, it will be closely watched by both supporters and critics of ESG policies nationwide.
