Mar. 24, 2022

HARRISBURG – The biggest financial firms in the nation are using subjective social justice measures to determine what businesses can get money, according to Rep. Perry Stambaugh (R-Perry/Cumberland). And, unless steps are taken to stop this practice, consumers will likely be impacted as well, he said.

Stambaugh has partnered with Reps. Russ Diamond (R-Lebanon), Dave Zimmerman (R-Lancaster), and Greg Rothman (R-Cumberland) on legislation to curb the overly broad expansion of environmental, social, and governance (ESG) scores. Banks, investment firms, and financial institutions are increasingly using these scores to determine what businesses qualify for loans and other necessary services like insurance−essentially, picking winners and losers.

“Many in the international monetary elite who espouse ESG principles believe access to capital is not a right, but a privilege,” Stambaugh said. “They contend that financial and business plan metrics should no longer drive investment − instead, ‘responsible and sustainable’ practices as selected by them should.”

“I am concerned our nation is reaching a point where very soon consumers with ‘good’ ESG scores may receive lucrative offers, easier loan terms, and even targeted packages designed to reward certain behaviors tied to ever-changing values and whims,” he continued. “Using ESG scores to control individual actions is an insidious infringement on personal liberty, and certainly stands in opposition to our country’s foundation of capitalism.”

The soon-to-be-introduced bill, known as the Virtue, Liberty, and Independence Act, after Pennsylvania’s state motto, would prohibit any business or corporation in the Commonwealth from using ESG scores as a sole condition of financing or providing services. It would also prevent ESG scores from being exclusively or primarily used in decision-making in consumer transactions, and it would block state Treasury and retirement plans from exclusively utilizing ESG scores when making investment decisions.

Representative Perry Stambaugh
86th District
Pennsylvania House of Representatives

Media Contact: Jennifer Fitch