Idaho Legislature introduces three bills opposing environmental, social and governance standards

The Idaho Legislature’s House State Affairs Committee on Wednesday introduced three new Republican–sponsored bills designed to combat the use of environmental, social and corporate governance — or ESG — standards.  

ESG standards and ratings are used in business investments and credit ratings, and can indicate social consciousness, a commitment to environmental stewardship or a commitment to sustainability.

In the past year since conservative pundit Glenn Beck discussed ESG during a February 2022 visit to the Idaho State Capitol, Republicans have seized on the standards as an example of a liberal, woke agenda run amok. But Idaho Association of Commerce and Industry President Alex LaBeau previously told the Idaho Capital Sun the standards have become the latest political boogeyman used to sow chaos and division, even though the issue is not new. 

“It’s become more of a bumper sticker battle than actually talking about the issue itself,” LaBeau said in June. 

Rep. Barbara Ehardt, R-Idaho Falls, presented two of the three new bills Wednesday.

• Ehardt’s first bill prohibits public entities, such as state and local governments from entering into contracts with companies that decline to do business with or penalize individuals or other companies for the production of fossil fuels or the manufacture, distribution or sale of firearms. 
• Ehardt’s second bill is designed to prevent banks and credit unions designated as state depositories from boycotting individuals or companies for the production of fossil fuels or the manufacture, distribution or sale of firearms. 

The third new ESG bill was sponsored by Rep. Jason Monks, R-Meridian, Ehardt and a group of 31 House Republican co-sponsors — nearly ensuring the bill has enough support to win the 36 votes in the House necessary to guarantee the bill’s passage. 

• The third bill specifies the state may not award or deny state contracts or bids based on environmental, social and governance standards. The eight-page bill specifies that state contracts must be based on competitive pricing, contract requirements and contractor qualifications 

“Unfortunately, the idea of ESG is truly antithetical to our American way of life, it is antithetical to a free market economy,” Ehardt told the House State Affairs Committee on Wednesday. “And the three pieces of legislation are primarily dealing with taking a stab at a means to deal with how it will affect us here in Idaho.”

Committee members asked Ehardt several specific questions about the bill.

Committee asks questions about new ESG bills, sponsors promise answers at public hearings

Rep. Vito Barbieri, R-Dalton Gardens, asked how the enforcement mechanism of her first bill would work if a violation was discovered several years into a five-year contract. 

Rep. John Gannon, D-Boise, asked if there was a cost to passing the first bill, given the extra work companies and state regulators would have to do to analyze every contract the state engages in. Gannon also asked if the bill applied to ESG outside of the United States or not. 

Rep. Brooke Green, D-Boise, asked Ehardt what the phrase “limiting commercial relations” means in her first bill and expressed concern that language is too broad. 

But Ehardt deflected many of the questions, saying she and other officials involved with drafting of the bill would address those questions during a full public hearing after the bill is introduced. 

“We will explain that more thoroughly when we come back (for a full hearing),” Ehardt told the committee at one point Wednesday,

Instead of addressing many of the specific questions, Ehardt devoted much of Wednesday’s meeting to talking about the merits of the bills and how a group of supporters had spent the past 10 months developing the bills. 

“I truly think you are going to find this presentation (next week) fascinating. Fascinating because of the work that has gone into it and the industries that have been involved and how we’ve come to, as I have said, Mr. Chairman, I have not been involved in a process where so much collaboration has been used to come to a point of agreement, and I look forward to sharing that with you,” Ehardt said. 

Wednesday’s hearing was only an introductory, or print hearing, and no public testimony was accepted. 

House State Affairs Committee Chairman Brent Crane, R-Nampa, said he intends to hold full public hearings on the three ESG bills on Monday or Tuesday. 

The new bills will be assigned a bill number and posted on the Idaho Legislature’s website once they are read across the desk on the floor of the Idaho House of Representatives later Wednesday or on Thursday.