Financial boycott bill introduced into legislature
CEDAR RAPIDS, Iowa (KCRG) - A bill introduced in the legislature says the state would no longer do business with companies that financially boycott specific industries: gun shops, fossil fuels, agriculture, and timber.
Financial institutions often implement an environmental, social, and governance investment model to screen companies before investing, also known as an ESG. Michael Ware, owner of Controlled Chaos Arms knows the struggle firsthand.
“It was the Friday before Christmas, we got an email, not even a phone call, which said ‘your contract has been terminated,’” he said.
Ware has owned his gun shop in Baxter Iowa since 2008 and has worked with the same bank for 14 years. He said the company told them it was against its policy to continue working with someone in the gun industry.
He’s hoping Iowa lawmakers will step in for others in the gun business, timber industry, and fossil fuel companies to ensure companies don’t drop them due to ESG investing strategies.
“I’m biased, I’ll admit that to you, but I’m not skirting the boundaries of some sort of rules ethics, or morality, I’m falling squarely within them and working hard to do it,” he said.
Peter Larsen, an attorney with a background in policy said companies have ESG investment policies for a reason.
“By eliminating those businesses, essentially from contention from those contracts, you end up having much greater instability and paying much higher rates than you would otherwise,” said Larsen.
Larsen believes the taxpayers would be the ones paying for this law. He pointed to a study published by the University of Pennsylvania Wharton of a similar law passed in Texas that cost taxpayers $ 300 million to $500- million.
“Do you want to be coercing businesses into forcing them to partner with business with gun companies fossil fuels logging industries they may not want to,” he said.
The bill has a long way to go before becoming law. Ware said this was about fairness and equality for someone whose business is following the law.
“I’ve had troubles over the years with lending institutions or even insurance,” he said. “This isn’t uncommon but it seems to be getting a heck of a lot worse.”
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