In a significant escalation of Oklahoma’s fight against environmental, social, and governance (ESG) criteria in state investments, Attorney General Gentner Drummond is taking the state’s 2022 anti-ESG legislation to the Oklahoma Supreme Court. Following a summary judgment by an Oklahoma County judge that undermined the law’s application, Drummond voiced strong dissatisfaction with the initial defense led by State Treasurer Todd Russ. “I am committed to repairing the damage done by the Treasurer and his hand-picked attorney. Frankly, Oklahomans deserved better than allowing this law to be jeopardized,” Drummond stated, setting a contentious tone for the appeal.
The Oklahoma Energy Discrimination Act of 2022 prohibits state funds from engaging with financial institutions that adopt policies against oil and gas, a measure Drummond defends as essential to protecting Oklahoma’s economic interests. Yet, the law has sparked controversy, especially as retirement fund holders voice concerns that restrictions on ESG investment options could destabilize pensions by limiting access to well-diversified portfolios. The initial lawsuit, filed by a retired state employee, underscores the delicate balance between supporting Oklahoma’s energy industries and ensuring the financial security of public funds.
As the case heads to the Oklahoma Supreme Court, it joins a broader national clash over the role of ESG policies in state finance. In Drummond’s view, the stakes go beyond investment strategy, touching on Oklahoma’s right to shield its key industries from what he characterizes as an ESG agenda that jeopardizes the state’s economic autonomy. “This isn’t just about finance; it’s about state sovereignty,” he added, positioning Oklahoma’s challenge within a larger movement among conservative states to resist what they see as federal overreach through ESG mandates.
Drummond’s stance is further illustrated in his recent successes against federal regulatory attempts. Just this month, the U.S. Supreme Court agreed to review Oklahoma’s “Good Neighbor” plan, a state proposal designed to address ozone emissions under the Clean Air Act without federal intervention. Oklahoma and several other states argue that the EPA’s rejection of the plan represents unwarranted interference in state-managed environmental policies. Drummond contends that the EPA’s demands impose excessive financial burdens on states like Oklahoma, which are heavily reliant on fossil fuel industries.
Parallel to his anti-ESG and “Good Neighbor” cases, Drummond has joined a multi-state coalition challenging the EPA’s mandate on electric heavy-duty trucks. This mandate, which aims to transform nearly half of all truck sales into electric by 2032, has been criticized by Drummond and others for overstepping the EPA’s regulatory authority and risking severe economic consequences. Drummond warns that such mandates threaten both the trucking industry and consumers by raising transportation costs and pressuring an already strained electric grid. “This outrageous edict, the product of an overzealous environmental agenda, would cause major disruptions and deliver a significant blow to the U.S. economy,” he declared, marking his opposition to what he considers an “ideological push” by federal agencies.
For Drummond, the fight to safeguard Oklahoma’s energy sector and fiscal policies embodies a wider struggle against environmental measures that, in his view, ignore the economic realities facing energy-dependent states. As his anti-ESG appeal moves forward, Oklahoma’s stance could set a precedent for other states grappling with ESG considerations in public investments, underscoring the question of where state authority ends and federal influence begins.
Drummond’s escalating legal battles with federal agencies reflect a potent intersection of energy policy, state rights, and the shifting boundaries of environmental governance. Whether defending Oklahoma’s sovereignty against EPA mandates or shielding public funds from ESG-driven restrictions, Drummond's actions resonate deeply within an intensifying national debate on the future of state-regulated finance and energy policy. The Supreme Court’s eventual ruling on Oklahoma’s anti-ESG law could reshape the landscape for states aiming to resist ESG mandates—an outcome Drummond seems prepared to pursue at all costs.
