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Alabama lawmaker introduces bill to ban ESG from public contract awards

State Rep. Chip Brown (R-Hollinger’s Island) introduced a bill to prohibit the use of environment, social, and government (ESG) criteria when awarding public contracts in Alabama.

Opposition to ESG practices has gained traction on the level of public policy in recent years, however, the issue is remains relatively unknown to the general public.

ESG is standardly defined by, “Environmental criteria consider how a company safeguards the environment, including corporate policies addressing climate change, for example. Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights.”

ESG criteria are set by analysts who identify the relevant issues facing specific sectors, industries, and companies. However, those factors are often criticized because companies become increasingly judged by how ‘socially conscious’ it is.

RELATED: AG Marshall to Congress: ESG ‘clear and present danger’

According to HB61, “This bill would prohibit the consideration of environmental, social, and governance (ESG) criteria when awarding a public contract and would require a responsible bidder, as a condition of being awarded a public contract, to certify, under penalty of perjury, that its employees will not be subject to a personal ESG rating as a basis of hiring, firing, or evaluation.”

Rep. Brown told Yellowhammer News that considering ESG factors “clouds the ability” of the government agency to award the work to the best contractor because it “doesn’t base it on qualifications,” rather, “they are considering philosophical and environmental extremist views rather than on who is best able to get the job done.”

Brown said that his legislation would apply to state agencies, local governments, as well as state universities.

HB61 has been assigned to the House State Government Committee. Brown said he hopes to see it on the agenda in the coming weeks.

Alabama Attorney General Steve Marshall has also taken on ESG at the state and national levels. On Thursday, Marshall posted: “The ESG sham is unraveling.”

Tuesday will be Day 7 of the 2024 Alabama Regular Legislative Session.

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