ALEC Is Pushing a Bill That Punishes Banks for Divesting From Fossil Fuels

A Big Oil-funded lobbying group has attacked financial firms that are withdrawing their money from fossil fuel companies. This is as climate change accelerates, and environmental disasters continue to multiply around the globe. Center for Media and Democracyhe has learned.

This month at the annual States and Nation Policy SummitOf the right-wing American Legislative Exchange Council (ALEC), a pay-to-play organization that brings together corporate lobbyists and mostly Republican state lawmakers to author model legislation, members of the group’s energy task force voted unanimously to approve a new model policy that would prevent financial companies that end investments in oil, gas, and coal companies from receiving state government contracts or managing state funds.

The bill, Energy Discrimination Elimination ActThe law directs state treasurers and comptrollers to keep a list of companies that oppose fossil fuels. Each government contract for a business with more than 10 employees must include verification that the company doesn’t boycott fossil fuel businesses.

The act and its supporters claim that fossil fuel divestment would hurt workers and state pension funds. However, it ignores the fact that growing U.S. renewable energy industryIts. lucrative stocks. According to the Department of Energy, renewable energy will make up for 80% of U.S. power generationBy 2050. ALEC staff suggested that lawmakers frame the bill to protect the economic interests in their states at the energy task force meeting today.

ALEC keeps the identities of its corporate members secret, but CMDIdentified hundreds of membersThis includes many utility and fossil fuel production companies. On its corporate board are Energy Future Holdings, Koch Industries’ lobbying arm, and Peabody Energy. Chevron, Devon Energy and Duke Energy are also members. EnCana, Energy Transfer to Marathon Petroleum, Pinnacle West Capital and QEP Resources are also included. The majority of ALEC’s revenueDonations from corporations are the source of this funding sponsorships, and other funders include foundations of GOP megadors like Charles Koch, fossil fuel magnate, and right-wing dark money vessels.

The model bill claims that “American and European fossil energy producers” are “among the most socially and environmentally responsible companies in the world.” ALEC has a history of climate change denialExxon, who had used ALEC for climate denial efforts, quit Exxon’s business group in 2018 because it was so extreme. ALEC members discussed this summer’s annual meeting. several other model billsResolutions that are aimed at protecting fossil fuel companies and opposing renewable initiatives.

“This proposed model bill…speaks mostly to the major impact that the fossil fuel divestment movement has made, with institutions and local governments worldwide divesting from fossil fuels to the tune of $1.5 trillion and counting,” Thanu Yakupitiyage, head of U.S. communications for, told CMD. “This bill cannot stop the reality that continued investments in fossil fuels are bad for communities and the planet. With less than eight years to turn around the worst impacts of the climate crisis, this bill is a desperate attempt by fossil fuel companies and their lobbyists to maintain their profits.”

Opposing “Woke” Banks

The “energy discrimination” act is already lawTexas is oil-rich and the Koch-funded Texas Public Policy Foundation, (TPPF) is there. celebratedIts passage. In an emailObtained by CMD, Jason Isaac, a former state representative who directs TPPF’s pro-fossil fuels initiative, told participants in ALEC committee meetings that the energy bill was an “opportunity to push back against woke financial institutions that are colluding against American energy producers.” He described banks and investment firms that decide to divest from and deny loans to fossil fuel companies as using “politically motivated and discriminatory investing practices.”

Isaac claims, “This language has also been carefully crafted to uphold First Amendment free speech principles and avoid restricting companies’ ability to adopt political stances on energy.”

But the bill is modeled after anti-BDS (the boycott, divestment, and sanctions movement critical of Israel’s treatment of Palestinians) legislationThe ALEC-promoted bill, which was passed in some form by 33 states, prohibits states from negotiating with companies that boycott Israel. These bills may have violated free expression rights, as the U.S. Court of Appeals in the Eighth Circuit ruled. struck down Arkansas’ law, writing that the law was too broad and that supporting or opposing boycotts is constitutionally protected expressive activity.

“​​We have recently seen a concerted legislative attack on the right to boycott,” Nicholas Robinson, senior legal adviser at the International Center for Nonprofit Law, told CMD. “It should concern everyone who cares about free speech when a state government punishes those who engage in a boycott.”

Late November, 15 Republican state treasurers sent a letter to U.S. banks announcing that they will begin “collective action” against companies that boycott fossil fuels. The officials wrote that they aim to “select financial institutions that support a free market and are not engaged in harmful fossil fuel industry boycotts for our states’ financial services contracts.”