Wyoming Treasurer Curt Meier is proposing some “slight tweaks” to the state’s investment policy that would address his ability to avoid working with entities that consider social and environmental factors when making financial decisions.
The state’s investment policy has already been updated to state that “fiduciary decisions can only be based on pecuniary factors,” which “do not include the furtherance of social, political, or ideological interests.”
But last week Meier approached the Wyoming Legislature’s Joint Appropriations Committee with another proposed change to the policy statement – including an additional phrase that would let the state “prefer vendors that do not adhere to the implementation of foreign treaties or policies which are not ratified by the U.S. Congress.”
He said the new language specifically targets organizations that have “signed on” to initiatives like the Paris Agreement that may be damaging to Wyoming’s fossil fuel industries.
“These people… have caused some extreme damage to our industries, and I don’t believe they’re going to let up,” Meier said. “We can push back. … If we find out that these folks are involved in what we consider things that distract them from getting a higher risk-adjusted return, (then) we’ll definitely contact them and find out whether or not we can move them away from that perspective.”
The change Meier proposed last week says the treasurer’s office “may respond to an investment partner when it is acting in a non-pecuniary manner … by communicating these concerns to management, its board or other responsible individuals.
“This may include but is not limited to: requests to change policies; voting of proxies to force change; and divestment and/or replacement with competitive alternatives.”
Wyoming Rep. Lloyd Larsen, R-Lander, said the changes to the treasurer’s policy statement could be made “in lieu of us doing any type of legislation” to limit state investments with organizations that take environmnetal, social, or governance (ESG) factors into consideration when making financial decisions.
But, Larsen recalled, “when we killed those bills last session … we made a commitment to industry in our state that we would come back and try and find a solution.”
“That’s really what we’re trying to do,” he said.
Since the legislative session ended, Larsen explained, “there’s kind of been this evolution,” and now the treasurer “feels it’s more appropriate to have an adopted policy statement” – rather than a new law – that lets the state “point out that our investments should be focused, not on social issues, but on the investment returns to the customer” and that “those types of actions that impact our industries are inappropriate.”
The committee’s objective, Larsen said, is to determine whether Meier’s proposed investment policy is “sufficient,” and whether “our industry feels that it is sending the message from the State of Wyoming that supports their position, too.”
“That’s really what I’m interested in doing,” Larsen said.
Meier expressed confidence that the proposed changes would “allow our office to get the results that industry is expecting.”
But Pete Obermueller, president of the Petroleum Association of Wyoming, wasn’t so sure.
“The policy I just saw today, I don’t see that there,” Obermueller said. “However … I do think there are things you can do that, at a minimum, would help to ensure that our investment funds and our permanent funds – which have been entirely created by the mineral extractive industry – that those funds are not used in ways that actively harm the industry in Wyoming.
“(We should) figure out if there are ways, via policies or legislation, that can help to prevent that. … I want to make sure that we have robust oversight of what our managers are doing with regard to shareholder activism. I want to know what they’re doing, and I want to know if we have a mechanism by which we can say (that) you can’t use our clout for these ends.”
Obermueller did not request any specific legislation “yet,” noting that “I think it can be handled at the treasurer’s office,” but he also pointed out that the legislature is the “primary branch” of government, and if an official in the executive branch “is not doing what the primary branch thinks it should do, absolutely you should step in.”
Wyoming Sen. Tim Salazar, R-Riverton, agreed with Obermueller on that point.
“I think that this is an issue for the legislature,” Salazar said. “I think that when you’re dealing with public funds that the state legislature does have a say in how that should be used. … The legislative body does have a responsibility to weigh in on that. If it’s an attack on coal or oil or gas, I think that we, as the people’s body, have a say in that. And that’s why I supported those two bills last session.”
The “difficulty,” Salazar said, “is coming up with the language that protects, not only the investments that we have, but at the same time, the will of the people of Wyoming – and I’ve heard loud and clear in my constituency how they feel about it.”
“I’ve dealt with some very angry folks in my constituency with regard to this issue,” Salazar said.
The appropriations committee didn’t take any action on the investment topic last week, opting to go with Larsen’s suggestion to “wait and see what the treasurer’s final policy is” before making any decisions.
“I’m hearing that there’s this sense that (the treasurer’s policy) might satisfy the concern that we have,” Larsen said. “If it does not, then maybe we have that conversation. …
“We need to follow up and see (what) policy they do adopt and see if that kind of resolves the problem.”