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Senate committee approves anti-ESG bill

The bill would prevent the state from contracting with companies that “boycott” other state companies using environmental, social and governance standards.

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Some Alabama companies don’t want to do business with other companies that aren’t meeting certain environmental, social and governance criteria.

And now some lawmakers in the state of Alabama are making it known that they don’t want to do business with those companies. It would prevent all governmental entities in the state from entering into contracts with such companies, with some exceptions.

The Alabama Senate committee on fiscal and responsibility and economic development ultimately approved the bill, SB261 by Sen. Dan Roberts, R-Mountain Brook, on a 10-3 vote along party lines.

The bill is essentially a boycott of a boycott.

The legislation sets out particular sectors that cannot be “economically boycotted” by other companies who hope to contract with the state.

The sectors include fossil fuels, timber, mining, agriculture and firearms and ammunition manufacturers.

It also precludes companies from boycotting companies who are not committed to meet environmental standards, particularly regulations to offset, reduce or eliminate greenhouse gas emissions. Or companies that doesn’t meet certain composition, compensation, or disclosure criteria. Or companies that don’t facilitate access to abortion, sex or gender change surgery, medications, treatment or therapy.

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“We’re trying to ensure that Alabama’s tax dollars will not be used to subsidize private entities that boycott law-abiding businesses for reasons relating to arbitrary or subjective standards,” Roberts said. “I think we’re starting to see it on a national front … We’re trying to stop is a movement that’s going on in the United States that’s commonly referred to with environmental social governance.”

Democrats brought concerns that the state could run afoul of federal law. The bill specifically orders the attorney general to “seek to prohibit the adoption of federal laws, rules, regulations, bulletins, executive orders, or other federal actions that may penalize, inflict economic harm on, limit commercial relations with, or change or limit the activities of a company in the state or a resident of the state based on the furtherance of economic boycott criteria or other similarly oriented rating.”

Sen. Vivian Davis-Figures, D-Mobile, said the bill steps on the first amendment rights of companies to do business, or not do business, with who they please.

The anti-ESG discussion has exploded onto the scene of the Alabama Legislature in recent weeks as similar legislation crops up in other red states across the country.

Some of the state’s largest business entities and lobbyists including Regions, RSA and the Business Council of Alabama factor in similar criteria when choosing who to do business with.

Jacob Holmes is a reporter at the Alabama Political Reporter. You can reach him at [email protected]

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