Wyoming latest to float anti-ESG bill

Wyoming has become the latest state to float legislation that restricts state funds from being invested with firms that consider environmental, social or governance factors in their actions or investment strategies.

Two of the state’s largest funds warned the bill would shrink the universe of asset managers willing to partner with the state and thus decrease their revenues.

The Wyoming House of Representatives introduced the Stop ESG-State Funds Fiduciary Duty Act on Jan. 2. The bill prohibits the investment of state funds with asset managers that have taken ESG-related actions or considered ESG factors in their investment strategies. The legislation says state funds can only consider “financial purposes,” and cannot include “any action taken, or factor considered, by a fiduciary or trustee with any purpose whatsoever to further social, political or ideological interests.”

A fiscal note accompanying the bill notes that the State Treasurer’s Office and the Wyoming Retirement System said the bill, if enacted, would decrease their revenues “primarily as a result of a smaller universe of investment managers willing to partner with Wyoming to provide investment opportunities.”

The Wyoming Retirement System estimated its pension fund would lose $193 million in fiscal year 2026, $387 million in 2027 and $580 million in 2028 compared to the status quo, which includes outperformance relative to the WRS reference portfolio.

The Treasurer’s office did not estimate the impact.

The note added that the bill’s administrative impact “appears to increase duties or responsibilities of one or more state agencies and may impact agency spending or staffing requirements.”

The treasurer’s office, retirement system and Republican state Rep. Christopher Knapp, who introduced the bill, did not respond to requests for comment.

It’s the latest bill to be floated by Republican states seeking to block firms that are perceived as considering ESG factors. In the Midwest, Ohio passed a law barring state pension funds from investing based on ESG factors and in December, the Indiana Public Retirement System moved to dismiss BlackRock from managing its assets due to concerns over the firm’s ESG commitments. In the Southwest, Texas,  Oklahoma and Kansas have passed anti-ESG laws, and the Southeast, Arkansas, Florida, Louisiana, Georgia and North Carolina have passed similar laws, according to the Anti-ESG Bill Tracker from Pleiades Strategy.  

The anti-ESG positions have sparked several legal battles. In Oklahoma, the attorney general is appealing a court ruling that issued a permanent injunction blocking enforcement of its anti-ESG law, the Energy Discrimination Elimination Act of 2022. A federal judge last August struck down a pair of year-old Missouri investment rules that regulated “non-financial” investment advice from broker-dealers and investment advisors.