Anti-ESG Bill Proves to Negatively Impact Texas’ Economy
Overview:
A recent study reveals that two anti-ESG laws passed in Texas in 2021 have caused a significant loss of jobs, decreased economic activity, and reduced tax revenues. Economist Jon Hockenyos emphasizes the unintended consequences of government interference in business decisions, stressing the importance of a free market. The research also shows increased borrowing costs for the state and higher fees for local governments issuing bonds due to reduced competition. Despite opposition, the legislation remains, reflecting a trend of prioritizing industry interests over environmental and social concerns.
Summary:
A recent study reveals the detrimental economic consequences of two anti-ESG (Environmental, Social, and Governance) laws passed in Texas in 2021. These laws have led to a significant loss of economic activity and over 3,000 full-time jobs in the state, along with decreased annual earnings and tax revenues. The legislation, which restricts Texas from conducting business with companies perceived to be boycotting the oil or firearms industries, has backfired, costing the state hundreds of millions of dollars.
The research, conducted by the Texas Association of Business, highlights the unintended repercussions of government interference in mandating values to businesses. Economist Jon Hockenyos, the study's author, emphasizes the adverse impact on the market when such legislation is enforced. The report underscores the importance of maintaining a free market structure and allowing businesses the freedom to choose professional finance institutions, as unnecessary restrictions can impede infrastructure projects and hinder local investment.
Furthermore, the study's findings align with previous research indicating increased borrowing costs for Texas due to the anti-ESG laws. The laws have resulted in reduced competition in the bond market, leading to higher fees for local governments issuing bonds. Despite opposition to the restrictions from some business groups, including within conservative-leaning states like Texas, the legislation remains in place, reflecting a broader trend of prioritizing industry interests over environmental and social considerations.
Source: https://www.investmentnews.com/esg/news/texas-anti-esg-laws-costing-state-more-than-700m-study-says-250945
