NC gov. vetoes environmental, social and governance policies bill

Saying the state treasurer is handcuffed on best interest decisions, North Carolina Gov. Roy Cooper late Friday afternoon vetoed legislation to ban ESG policies in state hiring and financial matters.

The measure on environmental, social and governance policies – making government hiring and financial decisions based on merit rather than climate change or social issues – passed the Senate 29-18 and the House of Representatives 76-41. Three-fifths – 30 in the Senate, 72 in the House if all are present – approval is needed should the Republican majorities seek to override the veto of the second-term Democrat, who cannot seek reelection in 2024.

Also vetoed and announced just before the weekend was the North Carolina Farm Act of 2023. Nine Democrats concurred in the Senate’s 37-6 vote, and eight in the House’s 77-38 decision.

On the environmental, social and governance policies bill, Cooper said, “This bill does exactly what it claims to stop. For political reasons only, it unnecessarily limits the treasurer’s ability to make decisions based on the best interest of state retirees and the fiscal health of the retirement fund.”

Five Democratic members of the House supported the measure; there were none in the Senate.

State Treasurer Dale Folwell oversees a pension that pays about $7 billion annually in gross benefits from the public pool of money – 27th largest in the world – that is roughly four times the state’s annual budget. The N.C. Retirement System is valued at $108 billion, the ninth-largest public pension fund among the states, and one of just 12 states with a AAA credit rating.

Screening investments based on how companies address climate change and other social issues is opposed by conservatives. They see it as a forced transition in energy sources, and promotion of social policies.

Republicans, throughout the process in committees, championed merit-based choices over ideology.

On the farm act, Cooper said, “The provision in this bill that severely weakens protection for wetlands means more severe flooding for homes, roads and businesses and dirtier water for our people, particularly in eastern North Carolina. This provision coupled with the drastic weakening of federal rules caused by the U.S. Supreme Court’s recent decision in the Sackett case, leaves approximately 2.5 million acres, or about one-half of our state’s wetlands, unprotected. The General Assembly has allocated tens of millions of dollars to protect the state from flooding and my administration is working to stop pollution like PFAS and other contaminants. This bill reverses our progress and leaves the state vulnerable without vital flood mitigation and water purification tools.”

PFAS, an acronym for per- and polyfluoroalkyl substances, are widely used, long lasting chemicals, components of which break down very slowly over time. Studies vary on their harmful effects; more is known about their impact on animals than on humans. PFAS, the Environmental Protection Agency says, “are found in water, air, fish, and soil at locations across the nation” and throughout the world.

Cooper neither signed nor vetoed Energy Choice/Solar Decommissioning Requirements, allowing it to become law. He did sign into law seven other bills.