Riley Moore is a nice young man from a prominent political family. He was elected to the House of Delegates in 2016 from the old 67^th District (Harpers Ferry and Shepherdstown) and was on his way to becoming the House Majority Leader in 2018 when a funny thing happened – Jefferson County voters turned him out of office.

Trying another path to public office, Moore ran for West Virginia Treasurer and was elected in November 2022. One wonders why Treasurer is a political office, for which the successful candidate need only demonstrate political skills not financial ones.  Good thing for Moore, because he had no financial education or demonstrated financial skills. Before trying his hand as a politician Moore received a degree in Government and International Politics and had a job with a defense contractor.

As Treasurer, Moore has relentlessly pursued a political agenda. In the last eighteen months, he has taken credit for two “culture war” policies that became laws after approval by the Republican super-majority in the Legislature. No surprise there. Let’s call them Moore’s Law No. 1 and No. 2. Both laws attack considering “ESG” factors (environmental, social, governance) in the investment of state funds. In case you hadn’t heard, ESG investing is the latest boogeyman of the political right.

West Virginia needs easy access to the municipal bond market to fund its needs and also has $34 billion in pension funds to invest. It retains respected banks and investment companies to create a market for its bonds and to invest the pension funds. Like any other investor, the state wants to get a reasonable return on its investments while minimizing unnecessary risks. Consideration of ESG factors that have a material impact on a company’s health is an important part of a sound investment policy. To ignore these risks would be irresponsible.

Considering ESG factors is not political, it’s just smart business. For example, if we invest in a coal company, will that investment have eroded in five or ten years? What if the market for coal dries up because of tougher government regulations or cheaper gas and renewable energy sources? On the other hand, does a company that develops clean water technology give us the return we want and provide a safer long term place for our money? Considering ESG factors does not undermine the pursuit of return on investment — ESG investors still seek the best returns. But it also better protects those returns from risk.

Nevertheless, Moore and his allies insist on making investing state funds a political issue. To them even considering ESG factors is a practice of “woke” liberals that West Virginia should reject. In one of his shrill press releases, Moore told West Virginians that “the ESG crusade being perpetrated by the liberal elites must be stopped!” This is just nonsense politics about culture, not economics.  In this posturing for right-wing votes, Moore has threatened the stability of state investments and will cost West Virginians money in the bargain.  He either doesn’t understand why it is important for investment managers to consider ESG factors or doesn’t care.

Moore’s Law No. 1 was enacted in 2022.  It empowers Moore as state Treasurer to create a list of financial institutions that, in his opinion, unreasonably “boycott” or limit commercial relations with any company engaged in the fossil-fuel based energy business.  Moore is authorized to disqualify firms on the restricted list from competitive bidding for state banking contracts or refuse to enter a banking contract with such firm, regardless of how financially advantageous to the state that contract might be.

Moore’s restricted list includes five of the largest, most sophisticated financial institutions in the United States — BlackRock Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, and Wells Fargo & Co. They provide banking services by generating a market for bonds issued by West Virginia state governmental units. The non-profit Sunrise Group commissioned a study of the costs to states who adopt anti-ESG legislation like Moore’s Law No. 1. The study estimated that in a single year of refusing to do business with these five firms, West Virginia would have to pay increased interest on its bonds of between $9 million and $29 million.

How have the five financial institutions targeted by Moore “boycotted” fossil-fuel energy companies to justify disqualification from doing business with West Virginia? Moore’s press release concerning BlackRock explained it – and you’d better cover your children’s ears for this one. BlackRock was disqualified because it “has urged companies to embrace ‘net zero’ investment strategies.” Seriously?

Isn’t this simply an effort to use politics to interfere with market forces, a practice free-market Republicans are supposed to hate? According to Dana Milbank, writing in the Washington Post, Moore and fellow Republican treasurers in other states are determined to “stop the free market no matter how much it costs.”  He reported that the Kansas Public Employees Retirement System expects that anti-ESG legislation could cause more than $1 billion in losses from early sale of assets and reduce returns by $3.6 billion over a decade. Arkansas public pension authorities said anti-ESG legislation there would cause them to lose $37 million per year.

West Virginia’s Treasurer doesn’t control the investment decisions for state pension funds. These funds are invested on the state’s behalf by banks and mutual funds at the direction of the West Virginia Investment Management Board and the Board of Treasury Investments. Periodically, our investments require these investment boards to vote as a shareholder on the direction of the corporations into which our funds have been invested. Moore’s law No. 2 requires these boards to consider only “pecuniary” factors when casting these shareholder votes. The law specifically states that “environmental, social, corporate governance, or other similarly oriented considerations are not pecuniary factors” unless they have an immediate financial impact.

When Moore’s Law No. 2 was enacted in 2023, he boasted by saying that the law was “leading the way to fight back against woke activists who want to use our state investments and retiree pension dollars to advance extreme political and social agendas.” Presumably he means saving the planet from catastrophic climate change.

The problems with Moore’s Law No. 2 are many, but the most significant is that it requires state investment board members who cast our votes to ignore long-term, systemic factors that, as fiduciaries, they can’t ignore. A 2021 study by the insurance giant Swiss Re estimated that by mid-century the world stands to lose 10% of its economic value from climate change. Moore’s Law No. 2 requires that our investment board trustees ignore this looming crisis and puts them in jeopardy of violating other state and federal laws regarding fiduciary duty.

Not to be unkind, but Riley Moore couldn’t think this stuff up on his own. Key features of Moore’s Law No. 2 are lifted straight from a template provided by the American Legislative Exchange Council to conservative legislators around the country. ALEC’s mission is to protect fossil-fuel energy industries at all cost, while instead claiming to be interested in small government. Moore’s Law No. 1 is based on a similar template that now even ALEC won’t support after complaints by the American Bankers Association that “government should not be dictating business decisions to the private sector.”

The point is that Moore’s legislative efforts do not spring from his own genuine concern about protecting West Virginia, as he claims, but rather from an ideological platform used by ultra-conservatives around the country. Other Republican-dominated states have passed nearly identical laws. Moore is taking advantage of this tool to become a Ron DeSantis clone, slaying the “wokeness” dragon. That plays to a certain crowd.

This all comes into better focus when you consider that Riley Moore is running for Congress. When the time comes, he will trot out his anti-ESG efforts to prove his conservative credentials. But his aggressive attack on the “liberal elites” and their evil conspiracy to halt climate change is just a boneheaded political stunt undertaken for the sake of publicity, without consideration of the costs it will impose on the average West Virginians Moore claims to protect.