A powerful rebuke from Utah’s statewide and federal elected officials is receiving high praise from proponents of small government. In an open letter, Beehive State lawmakers announced they would not cooperate with S&P Global Ratings’ increasingly politicized assessments supposedly evaluating their state’s financial health.
Investors look to these ratings to assess the risk of buying bonds from states. They often affect how easy — or difficult — it is for states to borrow money.
The group of Utahns, entirely made up of Republicans, specifically objected to S&P’s decision to publish environmental, social and governance (ESG) credit indicators for all 50 states. ESG assessments, they argue, “politicize what should be a purely financial decision.”
The letter emphasized that Utah wouldn’t cooperate with the gathering of ESG criteria. The signers correctly argue that ESG metrics are inherently anti-capitalist with a blatant political bias.
Supporters of the new metrics argue they provide a complete picture of a state and its municipalities’ financial outlook by demanding transparency on efforts to improve workforce diversity and fight climate change.
As Bloomberg reports:
The ratings agency assigned Utah ESG ratings in a credit indicator report published March 31, scoring environmental as “moderately negative,” and social and governance as “neutral.” The firm said it’s not a sustainability rating or a formal ESG evaluation.
The vast majority of states’ ratings were “neutral.”
S&P’s Utah report cited a concern about the long-term water supply in the Colorado River basin, though it added that the state’s planning “helps to alleviate additional pressure” in the analysis. Over a dozen states received the same environmental rating, including California, New York, Texas, Florida and others, while two others, Alaska and Wyoming, received a “negative” environmental rating.
The lawmakers’ letter demands S&P withdraw its ESG rating and stop publishing them.
Its signers are Governor Spencer J. Cox, Lt. Governor Deidre M. Henderson, Attorney General Sean D. Reyes, Treasurer Marlo M. Oaks, Auditor John Dougall, Senate President J. Stuart Adams, Speaker of the House Brad R. Wilson, U.S. Senators Michael S. Lee and Mitt Romney and U.S. Representatives Blake D. Moore, Chris Stewart, John R. Curtis and Burgess Owens.
Other GOP lawmakers and powerful associations like the U.S. Chamber of Commerce are simultaneously encouraging companies and other entities to reject ESG metrics.
In an op-ed for Fox Business, former Utah Congressman Jason Chaffetz urges other states to follow Utah’s lead with the following stark picture:
These metrics essentially grade borrowers on their compliance with a progressive Green New Deal agenda the American people have repeatedly rejected. Utah, by virtue of its careful spending and responsible debt repayment, has the best credit rating in the world. But despite its well-deserved creditworthiness, lenders could fear being penalized themselves for doing business with an energy-producing state.
Chaffetz warns the left-wing rating system will inevitably punish states whose politics don’t align with the new progressive agenda. However, he argues there’s a roadmap for states to fight back.
The question is if they will or not. In the end, voters will have their say as well, provided they pay attention to the critical state treasurer races on the ballots from Alabama to Wyoming.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.