Another blow for Oklahoma's anti-ESG law

(The Center Square) - Oklahoma's law banning companies that discriminate against the oil and gas industry remains on hold after a judge issued a continuing injunction.

The law was passed by the legislature in 2022. Don Keenan, a retired state employee who served on several boards, including the Oklahoma Public Employees and Justice and Judges and Retirement Board, challenged the law in court.

Oklahoma District Court Judge Sheila D. Stinson ruled on Friday to continue an injunction she first issued in May.

“I am disappointed in the ruling, as it significantly impacts a key industry in our state however, I remain hopeful," said Oklahoma Treasurer Todd Russ in an email to The Center Square. "The Attorney General will thoroughly address the procedures as we proceed with the appeals process. I look forward to the legislature addressing the issue in the coming session.”

Attorney General Gentner Drummond is appealing.

“The ruling comes as no surprise given the fact that Treasurer Russ and his hand-picked legal counsel already lost the initial hearing to defend the law. At that time, the judge ruled the plaintiff had established a ‘substantial likelihood’ of success on the merits of the case,” said OAG Communications Director Phil Bacharach. “We plan to appeal and hope we will be able to repair the damage at the Oklahoma Supreme Court.”

Drummond took over the case in May and fired Russ' counsel after Stinson's initial ruling.

Russ maintained the list of companies banned from doing business with the state based on environmental, social and governance policies that boycotted the oil and gas industry. Barclay's PLC, Blackrock Inc., Wells Fargo and Company, JPMorgan Chase and Company, Bank of America N.A., State Street Corp. and Climate First Bank have appeared on the list.

Oklahoma lawmakers proposed a bill that would clarify the law only applies to state contracts, not cities and municipalities, after a report from the Oklahoma Rural Association. The report said the law has unintended consequences for local governments, estimating it raised borrowing costs by 15.7% and added $184.78 million. Researchers used a "control group" of municipalities from surrounding counties in its study.

Russ said municipalities were never intended to be included in the law.

"I am unaware of any actual losses to municipalities, regardless of the claims in this report," Russ said. "From what I can gather, they were discussing neighboring state municipalities who experienced loses, not Oklahoma."

The bill did not pass.