Oklahoma AG fires counsel after anti-ESG law blocked by judge

May 17th, 2024

Oklahoma Attorney General Gentner Drummond has fired the Treasurer-appointed legal counsel on the state’s anti-ESG law case. 

The move followed District Court Judge Sheila Stinson’s decision last week to temporarily halt the state’s anti-ESG law, the Energy Discrimination Elimination Act. 

Drummond also removed Treasurer Todd Russ as a decision-making authority in the lawsuit, after Drummond said he had initially chosen a different firm to provide legal counsel but ceded to Russ, who insisted on choosing his own counsel, Pensions and Investments reports. 

The case has been brought by Don Keenan, a retired Oklahoma public servant, who claimed the act jeopardises his pension savings. 

Keenan has brought the case against Russ, as he claims the Energy Discrimination Elimination Act violates the Oklahoma Constitution, which states the pension systems should operate exclusively for the benefit of their beneficiaries.  

The act, which applies to the $11.6 billion Oklahoma Public Employees Retirement System (OPERS), prohibits state pension funds from investing in asset managers that use ESG criteria in their investment decision-making. 

The law would have seen OPERS divest around $6.8 billion from blacklisted firms, including BlackRock and State Street, due to their ties to climate groups such as the Net Zero Asset Managers Initiative. 

OPERS was able to take a fiduciary exemption from the law in back August to continue its investment relationship with both firms, but the state recently introduced new requirements for funds seeking exemptions to the rules. 

Several other Republican-led states, including North Carolina, have introduced similar laws requiring state-run funds to exclusively consider fiduciary factors when selecting investments, prohibiting them from taking ESG factors into account.