Dive Brief:
- The National Association of Counties, which represents about 3,000 U.S. counties, adopted a 2024-25 policy platform that includes a resolution opposing intrusions by state and federal lawmakers into counties’ fiduciary decisions.
- The resolution, approved last month, says policies that dilute local control of pensions, municipal bonds and government funds by imposing restrictions “threaten county governments' ability to deliver services to meet their own community’s needs by restricting access to essential data and regulating local government.
- State laws restricting counties or municipalities from investing with or utilizing financial institutions that take ESG into account — or are perceived to “boycott” certain industries — have risen in recent years. More than 10 states now have one or more such laws on their books, according to a tracker from Pleiades Strategy.
Dive Insight:
NaCo said the special interest-fueled national anti-ESG campaign is in opposition to “local control and free market principles,” and the group adopted a policy platform urging Congress and the White House to “support policies that provide for local governments’ ability to invest and borrow as they self-determine.”
The platform, which represents 3,069 counties of 3,243 U.S. and territorial county equivalents, specifically opposes legislation like the Congressional Review Act legislation to nullify the Department of Labor’s 2022 rule allowing pension fund managers to consider ESG factors.
“NACo urges Congress and the Administration to oppose legislation and policies which don’t support free enterprise and restrict local governments from fulfilling their elected duties to act as careful stewards of taxpayer resources,” the adopted policy reads.
The CRA to nullify the Labor Department rule, H.J.Res.30, passed both the House and Senate last year before being vetoed by President Joe Biden. The rule is still facing legal challenges. A Texas Northern District Court judge dismissed the initial lawsuit but utilized the now-overturned Chevron doctrine in the reasoning. An appeals court heard arguments in the case last month before remanding the case back to the lower court for reconsideration.
The county platform also specifically opposes a Senate bill that would restrict certain financial institutions from utilizing discount window lending programs for banks who deny lending to certain sectors. The law, the “Fair Access to Banking Act,” targets banks that don’t do business with certain sectors, name-dropping the Obama Administration’s “Operation Choke Point.” The Justice Department operation pushed banks to do less business with gun retailers and payday lenders.
NaCo called both legislative efforts “anti-local control and anti-free market policies.”
The organization also approved a second resolution supporting the Biden Administration’s Justice40 initiative and encouraged federal, state and local governments to collaborate on implementing it and similar environmental justice initiatives.
The Justice40 initiative is a goal to have 40% of the overall benefits of climate, clean energy, affordable and sustainable housing and similar investments go to “disadvantaged communities that are marginalized by underinvestment and overburdened by pollution,” according to the White House.
“The climate resilience challenge is most severe in disadvantaged communities, which are hurt ‘worst and first’ by flooding, extreme heat, extreme cold, and other results of climate change,” NaCo said.
The adopted policy urges federal collaboration with county governments to implement the Justice40 and other environmental justice initiatives. The counties ask that the federal government provide counties with technical assistance and coordination to access funding and that grant programs, guidance and notices of funding opportunities include environmental justice language.
“To build an equitable climate-resilient future, reparative climate resilient infrastructure investments are necessary to close the infrastructure gap that has resulted from past policies, and to enable communities that have been subject to disinvestment, underinvestment, and marginalization to fully participate in and benefit from such development,” the platform says.
