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Jake Ellzey wins special runoff for Texas’ 6th Congressional District

Jake Ellzey (R) defeated Susan Wright (R) in a special runoff election in Texas’ 6th Congressional District. With 98% of precincts reporting, Ellzey received 53% of the vote and Wright received 47% of the vote.

Ellzey will fill the vacancy left when the previous incumbent, Ronald Wright (R), died from COVID-19 related complications on Feb. 7. The district is located in the northeastern portion of the state and includes Ellis and Navarro counties and an area of Tarrant County.

Susan Wright is Ronald Wright’s widow. Former President Donald Trump (R) endorsed her on April 26. Former Texas Gov. Rick Perry (R) endorsed Ellzey.

Since both runoff candidates were Republicans, the seat will not change party hands as a result of the election. The two advanced from a 23-candidate special election on May 1. Wright received 19.2% of the vote while Ellzey received 13.8% of the vote.

Seven special elections have been called during the 117th Congress. Four of those have already taken place and none have resulted in a party change. From the 113th Congress to the 116th Congress, 50 special elections were held.

Voters to decide special Democratic primary in Ohio’s 11th Congressional District on Aug. 3

Thirteen candidates are running in the Aug. 3 special Democratic primary for Ohio’s 11th Congressional District. Former incumbent Marcia Fudge (D) vacated the seat to become secretary of housing and urban development in President Joe Biden’s (D) administration.

The Hill‘s Julia Manchester wrote that the race “has become a proxy battle for the Democratic Party establishment and national progressives,” referring to endorsements for candidates Shontel Brown and Nina Turner. Brown is on the Cuyahoga County Council. Turner is a former state senator and worked on Bernie Sanders’ 2016 and 2020 presidential campaigns. 

Hillary Clinton, the Congressional Black Caucus PAC, and House Majority Whip James Clyburn (D-S.C.) endorsed Brown. Sanders, the Congressional Progressive Caucus PAC, and Rep. Alexandria Ocasio-Cortez (D-N.Y.) endorsed Turner. Ocasio-Cortez campaigned in Cleveland for Turner on July 24. Clyburn and Sanders are scheduled to campaign in the district for Brown and Turner, respectively, over the weekend.

Seth Richardson of wrote that local endorsements don’t break down along the same dividing lines as national endorsements, citing in part Turner’s endorsements from local officials who supported Biden’s presidential primary campaign, including Cleveland Mayor Frank Jackson, and Brown’s share of endorsements from labor groups.

Both candidates say they have a record of delivering for the district and have the relationships needed to do so in the House. Brown emphasizes her relationship with Fudge and her support for the Biden administration. She said in a campaign ad, “For some, it’s about the limelight. For me, it’s about results.” Turner said at a debate that the district needs someone “who does have a vision, that understands being a partner does not mean being a puppet.”

Inside Elections rates the November general election Solid Democratic. 

Oklahoma Gov. Stitt appoints state supreme court justice

Oklahoma Gov. Kevin Stitt (R) appointed Dana Kuehn to the Oklahoma Supreme Court on July 26. The appointment filled a vacancy on the court caused by former Justice Tom Colbert’s retirement on Feb. 1. Kuehn is Stitt’s third nominee to the nine-member supreme court.

Under Oklahoma law, state supreme court justices are selected by the governor with help from a nominating commission. The nominating commission puts forward a list of three names from which the governor chooses the appointee. The appointed judge serves an initial term of at least one year before standing for retention in the next general election.

Before her appointment to the supreme court, Kuehn served as a judge on the Oklahoma Court of Criminal Appeals. She was appointed to that seat in 2017. From 2006 to 2017, Kuehn was a Tulsa County associate district judge. Prior to becoming a judge, she worked as a Tulsa County district attorney and as an attorney in private practice with Steidley & Neal, PLLC. Kuehn earned a B.A. in political science from Oklahoma State University and a J.D. from the University of Tulsa College of Law.

With her appointment to the supreme court, Kuehn became the first woman to serve on both of Oklahoma’s high courts.

In 2021, there have been 14 supreme court vacancies in 12 of the 29 states where replacement justices are appointed instead of elected. To date, 12 of those vacancies have been filled.

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Margo Davidson resigns from Pennsylvania House of Representatives

Margo Davidson (D) resigned from the Pennsylvania House of Representatives on July 23 after state Attorney General Josh Shapiro (D) filed criminal charges against Davidson on July 22. The charges included theft, solicitation to hinder apprehension, and election code violations. 

According to Politics PA, Shapiro’s office said Davidson allegedly “‘requested overnight expenses for nights she did not spend in Harrisburg and received personal reimbursements’ from the state ‘for expenses that had been paid for by her campaign,’ and that she’s also been charged for ‘failure to report campaign finance information, as well as soliciting a witness to lie during the course of the investigation.'”

In her resignation letter, Davidson said, “Today, I sadly announce my resignation and take legal responsibility for improper record keeping and reimbursement of expenses…I further take responsibility for and regret not fully participating with the investigation.” Her arraignment is scheduled for Sept. 10.

Davidson initially was elected to the state House in November 2010, defeating Maureen Carey (R), 54% to 46%. She was most recently re-elected in 2020 unopposed. 

If there is a vacancy in the Pennsylvania House, a special election must be held to fill the vacant district. As of July 26, there have been 67 state legislative vacancies across the United States this year. Of those 67, 37 are filled through special elections. 

Additional reading: 

The Daily Brew: Previewing next week’s special election primary in Ohio’s 11th Congressional District

Welcome to the Wednesday, July 28, Brew. Here’s what’s in store for you as you start your day:

  1. Voters to decide special Democratic primary in Ohio’s 11th Congressional District on Aug. 3
  2. Jake Ellzey wins runoff for Texas’ 6th Congressional District
  3. Here’s an update on the recall election of California Gov. Gavin Newsom 

Voters to decide special Democratic primary in Ohio’s 11th Congressional District on Aug. 3

Let’s continue our previews of next week’s highlighted elections with a look at the Democratic primary in the special election for Ohio’s 11th Congressional District.

Thirteen candidates are running for the Democratic nomination in this district that extends from Cleveland to Akron in the northeast part of the state. Former incumbent Marcia Fudge (D) resigned in March after being confirmed as Secretary of Housing and Urban Development in President Joe Biden’s (D) administration.

The Hill‘s Julia Manchester wrote that the race “has become a proxy battle for the Democratic Party establishment and national progressives,” referring to endorsements for candidates Shontel Brown and Nina Turner. Brown is on the Cuyahoga County Council. Turner is a former state senator and worked on Bernie Sanders’ 2016 and 2020 presidential campaigns. 

Hillary Clinton, the Congressional Black Caucus PAC, and House Majority Whip James Clyburn (D-S.C.) endorsed Brown. Sanders, the Congressional Progressive Caucus PAC, and Rep. Alexandria Ocasio-Cortez (D-N.Y.) endorsed Turner. Ocasio-Cortez campaigned for Turner in Cleveland on July 24. Clyburn and Sanders are scheduled to campaign for Brown and Turner, respectively, this weekend.

Seth Richardson of wrote that local endorsements don’t break along the same dividing lines as national endorsements. Richardson noted Turner’s endorsements from local officials who supported Biden’s presidential primary campaign, including Cleveland Mayor Frank Jackson, and Brown’s share of endorsements from labor groups.

Early voting began July 7 and continues through Aug. 2. Laverne Gore and Felicia Ross are competing in the Republican primary, and the winners of both primaries will meet in the Nov. 2 special election. Inside Elections rates the November general election Solid Democratic.

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Jake Ellzey wins runoff for Texas’ 6th Congressional District 

Jake Ellzey (R) won Tuesday’s runoff election over Susan Wright (R) in Texas’ 6th Congressional District. With 98% of precincts reporting, Ellzey received 53% of the vote to Wright’s 47%. The former incumbent, Rep. Ronald Wright (R), died on Feb. 7 from COVID-19 related complications. Susan Wright is Ronald Wright’s widow. 

Former Texas Gov. Rick Perry (R), U.S. Rep Dan Crenshaw (R-Texas), and The Dallas Morning News endorsed Ellzey. Former President Donald Trump (R) and the Texas Republican Party executive committee endorsed Wright. Both candidates advanced from a 23-candidate special election on May 1.

Since both candidates in the runoff were Republicans, the seat did not change party hands as a result of this election. Seven congressional special elections have been scheduled or held so far this year. From the 113th Congress to the 116th Congress, 50 special elections were held. 

Keep reading 

Here’s an update on the recall election of California Gov. Gavin Newsom

Here’s some recent news regarding the Sept. 14 recall election of California Gov. Gavin Newsom (D). The recall will present voters with two questions. The first will ask whether Newsom should be recalled, and the second will ask who should succeed him if a majority of voters approve the first question. 

Candidate list finalized

Secretary of State Shirley Weber (D) released the final list of certified candidates on July 21. Forty-six candidates qualified for the recall, including nine Democrats, 24 Republicans, and 13 candidates with a third party or no party affiliation. Among the candidates are radio host Larry Elder (R), 2018 gubernatorial candidate John Cox (R), former San Diego Mayor Kevin Faulconer (R), former Olympian and television personality Caitlyn Jenner (R), Assemblyman Kevin Kiley (R), former U.S. Rep. Doug Ose (R), and YouTuber Kevin Paffrath (D). 

A California Superior Court judge ruled on July 21 that Elder had met the state’s ballot requirements to become a candidate after Weber’s office had previously rejected him. The judge ruled Weber was wrong to require candidates running in the recall election to submit five years of tax returns and said a 2019 state law requiring that information did not apply to the recall. 

Polls released

Two organizations released polls in the last week showing opposition to the recall slightly higher than support but within each poll’s margin of error: 

  • Berkeley IGS released a poll on July 27 that showed 50% of respondents opposed the recall, and 47% supported it. Three percent were undecided. Elder (R) led the survey’s candidate polling at 18%, with no other candidate receiving more than 10% support and 40% of respondents undecided.
  • Inside California Politics and Emerson College released a poll on July 22 finding that 48% of voters opposed the recall, 43% supported it, and 9% were undecided. Elder led candidate polling at 16%, with no other candidate polling higher than 6%. Fifty-three percent of respondents were undecided on the candidate polling.

Keep reading 

Documenting America’s Path to Recovery #284: July 27, 2021

Welcome to Documenting America’s Path to Recovery. Today we look at:

  • A law banning vacproof-of-vaccination requirements in New Hampshire
  • Updated indoor masking guidance in Louisiana
  • Vaccine distribution
  • Lawsuits about state actions and policies 
  • State-level mask requirements
  • COVID-19 emergency health orders
  • COVID-19 policy changes from this time last year 

We are committed to keeping you updated on everything from mask requirements to vaccine-related policies. We will keep you abreast of major developments—especially those affecting your daily life. Want to know what we covered Thursday? Click here.

Since our last edition

What rules and restrictions are changing in each state? For a continually updated article, click here.

California (Democratic trifecta): On Monday, July 26, the state of California announced that all state employees and healthcare workers would be required to show proof of vaccination or be tested at least once a week for COVID-19. The policy will take effect Aug. 2, for state workers, and Aug. 9, for healthcare workers. The deadline for full compliance for health care facilities is Aug. 23.

Florida (Republican trifecta): On Friday, July 23, the Court of Appeals for the Eleventh Circuit reversed its July 17 ruling that allowed the Centers for Disease Control and Prevention (CDC) to enforce its coronavirus restrictions on cruise lines in Florida. For cruise ships to set sail, the CDC required they mandate that 95% of passengers and 98% of crews be fully vaccinated. Gov. Ron DeSantis (R) sued the CDC in April 2021, arguing the agency overstepped its authority when it issued its four-phase plan for reopening the cruise industry. Florida Senate Bill 2006, which DeSantis signed into law on May 3, prohibits businesses from requiring proof of vaccination. On June 18, U.S. District Court Judge Steven Merryday granted Florida a preliminary injunction against the restrictions. The Court of Appeals for the Eleventh Circuit overturned that injunction on July 17.

New Hampshire (Republican trifecta): On Friday, July 23, Gov. Chris Sununu (R) signed House Bill 220, which prohibits state and local government agencies from requiring people to provide proof of vaccination to enter public facilities or receive services. 

New York (Democratic trifecta): On Monday, July 26, New York City announced that starting mid-September all government employees will be required to provide proof of vaccination or be tested weekly for COVID-19.

Kentucky (Democratic governor): On Monday, July 26, Gov. Andy Beshear (D) recommended that school districts require all students under 12, all other unvaccinated students, and all unvaccinated adults to wear masks indoors.

Louisiana (Democratic governor): On Friday, July 23, the Louisiana Department of Health issued updated guidance recommending all residents wear face coverings indoors when six feet of physical distancing is not possible.

Vaccine distribution

We last looked at vaccine distribution in the July 22 edition of the newsletter. As of July 27, the states with the highest vaccination rates as a percentage of total population (including children) were:

The states with the lowest rates were:

Lawsuits about state actions and policies

Read more: Lawsuits about state actions and policies in response to the coronavirus (COVID-19) pandemic, 2020


  • To date, Ballotpedia has tracked 1,834 lawsuits, in 50 states, dealing in some way with the COVID-19 outbreak. Court orders have been issued, or settlements have been reached, in 561 of those lawsuits. 

Since July 20, we have added four lawsuits to our database. We have also tracked an additional four court orders and/or settlements. 


  • Stepien v. Murphy: On July 1, a group of New Jersey public school students and parents sued state officials in the U.S. District Court for the District of New Jersey. Plaintiffs asked the court to prohibit officials from implementing school mask mandates and “other Covid-related preventative, isolation, and segregation policies.” Plaintiffs also asked the court to bar schools from administering COVID-19 tests to students without parental consent. Plaintiffs say reimposing these COVID-19 mitigation policies would “violate the First, Fifth, and Fourteenth Amendments to the United States Constitution.” The plaintiffs allege mask mandates “burdens and impairs protected speech rights, inhibiting and preventing communication between students, and between students, teachers and aides.” Plaintiffs also allege mandatory nasal swab tests are “invasive and in many cases causes injury, pain, and anxiety.” The case was assigned to Judge Kevin McNulty, an appointee of Barack Obama (D).

State mask requirements

We last looked at face coverings in the July 20 edition of the newsletter. Since then, Hawaii has relaxed its outdoor face-covering requirement.

COVID-19 emergency health orders

Read more: State emergency health orders during the coronavirus (COVID-19) pandemic, 2021

Governors and state agencies in all 50 states issued orders declaring active emergencies in response to the coronavirus pandemic. These orders allowed officials to access resources, like stockpiles of medical goods and equipment, unavailable to them during non-emergencies and temporarily waive or suspend certain rules and regulations. 


  • COVID-19 emergency orders have expired in 26 states. Emergency orders remain active in 24 states.
    • Since July 29, no states have ended their statewide COVID-19 emergencies. 

This time last year: Monday, July 27, and Tuesday, July 28, 2020

The first case of COVID-19 in the U.S. was confirmed on Jan. 21, 2020. But it wasn’t until March when the novel coronavirus upended life for most Americans. Throughout March and April, many states issued stay-at-home orders, closed schools, restricted travel, and changed election dates. Many of those policies remain in place today. Each week, we’ll look back at some of the defining policy responses of the early coronavirus pandemic.

Here’s what happened this time last year. To see a list of all policy changes in each category, click the links below.

Monday, July 27, 2020

  • Travel restrictions:
    • As part of Phase Two of D.C.’s reopening plan, Washington D.C. Mayor Muriel Bowser (D) ordered non-essential travelers from “high-risk” states to self-quarantine for 14 days upon arrival in the city. Bowser defined “high-risk states” as areas where the seven-day moving average of daily new COVID-19 case rate was 10 or more per 100,000 people.
  • Election changes:
    • West Virginia Secretary of State Mac Warner (R) announced that all voters “concerned about their health and safety because of COVID-19” would be eligible to vote absentee in the Nov. 3 general election.
    • Texas Gov. Greg Abbott (R) issued a proclamation extending the early voting period for the Nov. 3 general election by six days. Originally scheduled to begin on Oct. 19, the proclamation moved early voting to Oct. 13.
  • Mask requirements:
    • Gov. Eric Holcomb (R) enacted a face-covering requirement. Under the order, anyone eight years or older were required to wear a mask in indoor public spaces, commercial businesses, and transportation services. Masks were also required in outdoor public spaces when social distancing was not possible. Holcomb issued the order July 24.
  • School closures and reopenings:
    • The Massachusetts Department of Elementary and Secondary Education signed an agreement with the state’s teachers unions to reduce the length of the 2020-2021 school year from 180 days to 170 days.
  • State court changes:
    • The Idaho Supreme Court delayed the resumption of criminal jury trials until Sept. 14 and civil jury trials until Dec. 1.

Tuesday, July 28, 2020

  • Stay-at-home orders and reopening plans:
    • Kentucky Gov. Andy Beshear (D) closed bars and limited restaurant capacity to 25% for two weeks. Beshear also asked schools to avoid reopening for in-person instruction until the third week of August. 
  • Travel restrictions:
    • Govs. Ned Lamont (D-Conn.), Phil Murphy (D-N.J.), and Andrew Cuomo (D-N.Y.) announced that Illinois, Kentucky Minnesota, Washington D.C., and Puerto Rico had been added to the joint travel advisory, bringing the total number of states to 37. Travelers from states on the advisory were required to quarantine for 14 days.
  • Election changes:
    • U.S. District Court for the District of New Hampshire Judge Joseph Laplante reduced the number of signatures needed to qualify Libertarian Party candidates for the ballot by 35%.
  • School closures and reopenings:
    • Vermont Gov. Phil Scott (R) announced that schools will not reopen until Sept. 8, when school districts could decide whether to return students to physical classrooms or offer distance learning. 
    • Nevada Gov. Steve Sisolak (D) ordered all public K-12 students and staff to wear a mask in school at all times. The directive also imposed social distancing guidelines of three feet for preschools through middle schools, and six feet for high schools.
    • Oregon Gov. Kate Brown (D) announced metrics that would guide school reopening decisions. Brown said counties must have 10 or fewer coronavirus cases per 100,000 people and a 7-day positivity rate of 5% or less for three consecutive weeks before in-person and hybrid instruction could resume. Brown also said the state must have a positivity rate of 5% or less for three consecutive weeks before any in-person or hybrid instruction could resume.
    • Tennessee Gov. Bill Lee (R) released guidelines for reopening schools. The recommendations covered testing and contact tracing, immunizations, and resources necessary for returning students to classrooms or teaching remotely.

Additional activity

In this section, we feature examples of other federal, state, and local government activity, private industry responses, and lawsuits related to the pandemic. 

  • On Monday, July 26, St. Louis, MO, enacted a mask requirement. Missouri Attorney General Eric Schmitt (R) has filed a lawsuit challenging the mask requirement.
  • The U.S. Veterans Administration announced that all Title 38 employees will be required to be vaccinated against COVID-19 effective in eight weeks.

Economy and Society: SEC continues internal debate about its role in ESG investing

ESG Developments This Week

In Washington, D.C.

SEC continues internal debate about its role in ESG investing

On July 20, SEC Commissioner Hester Peirce delivered an address at the Brookings Institution in which she again made the case that the SEC’s current leadership is overstepping both its regulatory mandate and the bounds of what is objectively knowable about corporations and their impact on aggregate measures of environmental, social, and corporate governance (ESG) well-being. Peirce’s address, which is the latest public airing of grievances on the part of SEC Commissioners, conceded that SEC Chairman Gary Gensler and his supporters on the Commission have their hearts in the right place, seeking predictability for investors, but warned that, in her view, outcomes and intentions are often at odds. As a framework for her critique of proposed new disclosure mandates, Peirce presented ten theses that she argues all interested parties must consider before the Commission votes to make new disclosures compulsory:

“I. ESG as a category of topics is ill-suited, and perhaps inherently antithetical, to the establishment of clear boundaries and internal cohesion.

II. Many ESG issues lack a clear tie to financial materiality and therefore do not warrant inclusion in SEC-mandated disclosure.

III. The biggest ESG advocates are not investors, but stakeholders.

IV. ESG rulemaking is high-stakes because so many people stand to gain from it. 

V. “Good” in ESG is subjective, so writing a rule to highlight the good, the bad, and the ugly will be hard.

VI. An ESG rulemaking cannot resolve the many debates around ESG models, methodologies, and metrics. 

VII. Emotions around ESG issues may push us to write rules outside our area of authority. 

VIII. ESG issues are inherently political, which means that an ESG rulemaking could drag the SEC and issuers into territory that is best left to political and civil society institutions.

IX. ESG disclosure requirements may direct capital flows to favored industries in a way that runs counter to our historically agnostic approach.

X. An ESG rulemaking could play a role in undermining financial and economic stability.”

Peirce concluded, arguing that the SEC’s probable contravention of its statutory bounds could be remedied, if the Commissioners decided to take a more cautious, less over-optimistic approach to its regulatory limitations:

“You have made it with me through ten theses, so I will quickly draw to a close. I do not want to do so without first offering a potential better path forward. Rather than embarking on a prescriptive ESG rule that departs from and undermines our agency’s limited, but important, role, we could work within our existing regulatory framework. We could put out updated guidance to help issuers think through how the existing disclosure regime already reaches many ESG topics and to address frequently asked questions that arise in connection with the application of the existing disclosure regime. We also might consider whether we can give any Commission-level comfort about forward-looking statements along the lines of what former Chairman Clayton, Corporation Finance Director Bill Hinman, and Office of Municipal Disclosure Director Rebecca Olsen did in connection with COVID-19. Finally, we can work with investment advisers using ESG strategies and products to ensure that investors understand what that adviser’s brand of ESG means in theory and practice. I am looking forward to hearing other suggestions in the discussion that follows.”

On Wall Street and in the private sector

European ESG assets take a tumble—by design

According to the Global Sustainable Investments Alliance, the amount of money held by Europeans in sustainable investments fell from $14 trillion to $12 trillion. Given the relative stability of the bull market and the flood of funds into ESG, that seems counterintuitive at best. But it’s not, according to a Bloomberg Green story. The drop was not caused by decreasing value or a change in priorities but by an intentional reclassification of assets. Bloomberg Green reports:

“The decline isn’t the result of dampened investor enthusiasm for ESG investments, it’s because policy makers have tightened the parameters for what can be considered a responsible investment, said Simon O’Connor, chair of the GSIA….

Europe has led the global charge into ESG investments and its banks and fund managers are most advanced in calculating the impacts of their operations on climate change and biodiversity. The bloc’s politicians also have embraced sustainability by developing the world’s most ambitious climate strategy and a suite of new rules to bring the world of finance in line with its carbon neutrality target.

The EU’s anti-greenwashing rules known as the Sustainable Finance Disclosure Regulation, or SFDR, were introduced in March and require fund managers to evaluate and disclose the environmental, social and corporate governance features of their financial products. They require fund managers to classify funds, with Article 8 funds defined as those that actively promote environmental or social characteristics, while Article 9 funds have sustainable investment as their objective, with both categories subject to higher standards of disclosure under the SFDR.”

Meanwhile, in the rest of the world, sustainable assets continued to grow unremittingly:

“[S]ustainable investment assets in the U.S. increased to $17 trillion last year from $12 trillion two years earlier. Canada recorded the largest proportional gain in ESG assets between 2018 and 2020, with a 42% jump to $2.4 trillion.

The sustainable investment industry grew 15% in the two-year period to $35.3 trillion, and now accounts for 36% of all professionally managed assets across the U.S., Canada, Japan, Australasia and Europe, GSIA said.”

The Financial Times reports two stories of dissent

First, on July 18, FT reported that the private equity business appears, on paper at least, to have become a hub of counter-cultural investing, in which ESG issues are treated with rather less deference than they are in the world of publicly traded companies:

“Done well, private equity has a crucial role to play in modernising economies, helping companies to restructure efficiently away from the short-termist glare of public markets. Buyout firms rightly pounce on listed companies that they deem undervalued or bloated. In so doing, they keep capitalism efficient and act as a positive reactionary force.

But is private equity also reactionary in the conservative backlash sense of the word — facilitating a rebellion against some of the progressive constraints of public company existence, particularly the growing demands of complying with standards on environmental, social and governance issues? The evidence is mounting.

More freedom on governance has long been seen as a plus for private companies. As listed company governance has become stricter, so the advantage of private company status has increased. Heads at private equity owned companies relish diminished bureaucracy and the ability to earn more money without critical scrutiny from public company shareholders. Fortress’s agreed £9.5bn buyout of Morrisons this month came with a strong hint that management “incentives structures” would be boosted, only weeks after the listed UK supermarket suffered a shareholder revolt over pay….

Social issues, S of ESG, are also antithetical to much traditional private equity. Many listed companies increasingly trumpet “stakeholder value”, expressing concern for staff, customers and a company’s local area. Private equity remains a safe space for the hard-nosed. Quite rightly in some instances: public-company management may have been loath to take tough decisions on closing shops, factories or offices, and making job cuts.

But it is in the environmental field that a good chunk of the private equity industry is playing its most obviously reactionary role. When oil majors are looking to sell off stranded production assets, private equity are among the readiest bidders.”

On July 22, FT returned to the issue of ESG vs. shareholder value, with a profile of Eiji Hirano, the former chairman of the board of the Japanese Government Pension Investment Fund, the largest pension fund in the world. According to the paper: 

“Though carefully framed, Hirano’s comments highlight increasingly urgent questions over the future direction of the GPIF since the departure in March 2020 of its charismatic chief investment officer Hiromichi Mizuno.”

“The GPIF [Government Pension Investment Fund] must always go back to its investment purpose,” says Eiji Hirano, who stood down from the job three months ago. His comments reflect concerns that too great a focus on environmental, social and governance (ESG) standards can add risk, including a possible collision between the law and the investment philosophy under the GPIF’s previous regime.

According to the law under which the GPIF operates, it must invest with the sole purpose of benefiting Japanese citizens through the returns generated….”

“[A]rguably Mizuno’s boldest achievement, which he proselytised about at Davos and other global financial forums, was yoking the GPIF name to the then fledgling theme of ESG investing. The campaign included what Mizuno himself described as the “epochal” decision to mandate index-compilers FTSE and MSCI to create ESG indices for the GPIF. It sent the message that the GPIF under his stewardship would regard ESG factors as financially relevant.”

“That, says Hirano, is one key area where debate is now focused. While there is increasing evidence that some aspects of ESG-themed strategies boost returns in the long term, he thinks many ESG proponents, including Mizuno, rely on the argument that it is “common sense” that this will be the case across the board.”

EU efforts to compel greater disclosure receive pushback—months ahead of implementation

On July 6, the European Commission finalized its new banking regulation known as the green assets ratio. The regulation will go into effect in 2022, and banks will be compelled to make their first report by 2024. The GAR is designed to measure the green loans and securities a bank possesses (against its total assets). And according to Bloomberg, banks are already crying foul:

“It’s meant to be the ultimate metric for gauging how clean European banks are. But some in the industry say it will be flawed from the get-go.

The European Union’s planned Green Asset Ratio, intended to reveal how much a bank lends to climate-friendly companies and projects, will offer a distorted picture of reality, according to a Bloomberg survey of some 20 major European banks. The firms, which rely on clients for the data they need to calculate the ratio, point out that many small or international companies simply won’t provide it….

Europe is taking a more aggressive approach than the U.S. and other jurisdictions on climate change and will ultimately penalize financial firms that turn a blind eye to global warming. Banks that have long touted their green credentials are now being told to back up those claims with hard data. Lenders perceived to be laggards risk losing investors and depositors.

The European Banking Authority, which mapped out the Green Asset Ratio, says the metric will help compare banks both in terms of their exposures as well as their sustainability strategy and how they plan to mitigate climate-change related risks. The EBA “strongly believes” that the availability, quality and exchange of data can be improved with the right regulatory framework and incentives, a spokeswoman for the Paris-based authority said by email. Banks will also be allowed to use estimates for the environmental impact of their clients, she said.”

In the Spotlight

Moody’s launches new ESG ratings service

Moody’s just launched an ESG ratings service for small and medium-sized companies. But because ESG data is unavailable or limited for smaller companies, Moody’s had to develop a new methodology for estimating or predicting a company’s ESG ratings, which it has done:

“Based on a model derived from Moody’s proprietary ESG scoring methodology for large-cap corporates, the ESG Score Predictor provides financial institutions with essential quantitative data for portfolio and risk management, and helps companies monitor ESG risk across their global supply chains….

Assessing companies’ exposure to ESG risks requires comparable and standardized metrics. Limitations in company disclosures continue to affect data quality and company coverage, especially in the SME space. The ESG Score Predictor leverages state-of-the-art advanced analytics to provide 56 ESG scores and sub-scores for any given company using location, sector, and size. Customers can access approximately 140 million company ESG scores on Moody’s Orbis database, Procurement Catalyst and Credit Catalyst platforms, via an application programming interface (API), or leverage the ESG Score Predictor model with their in-house data to score their portfolios.”

What this means, according to a Moody’s white paper on the subject, is that the number of companies on which it can provide estimated ESG scoring is now infinite. According to the paper, “As long as we have data on a firm’s size, location, and industry, we can use these three factors as inputs to generate predicted metrics using the SP models.”

Washington sheriff recall to be held Aug. 3

A recall election seeking to remove Jerry Hatcher from his position as Benton County Sheriff in Washington is being held on Aug. 3. Recall supporters had to collect 13,937 signatures in six months to put the recall on the ballot. 

The recall effort began in July 2020 and was led by the Benton County Sheriff’s Guild. Members of the guild said Hatcher had performed his duties in an improper manner, committed illegal acts, and violated his oath of office. 

Hatcher, who first took office in May 2017, said the guild was refusing to hold deputies accountable. He said the guild would not let him take disciplinary action against employees who committed wrongdoing.

Washington requires recall petitions to be reviewed by a judge before they can be circulated. Walla Walla County Superior Court Judge Scott Wolfram approved the recall petition against Hatcher on Aug. 20, 2020. Hatcher appealed the decision to the Washington Supreme Court, which ruled on Nov. 6 that the recall effort could move forward and begin collecting signatures. The 13,937 signatures required to get the recall on the ballot was equal to 25% of the votes cast in the last sheriff election. Recall supporters submitted 16,552 signatures on April 23. The Benton County Auditor verified 14,215 signatures, allowing the recall to be put on the ballot.

In the first half of 2021, Ballotpedia tracked 164 recall efforts against 262 officials. This was the most recall efforts for this point in the year since the first half of 2016, when we tracked 189 recall efforts against 265 officials. In comparison, we tracked between 72 and 155 efforts by the midpoints of 2017, 2018, 2019, and 2020.

Additional reading:

Georgia’s suspended insurance commissioner found guilty on 37 charges of fraud; voters to decide in 2022 on suspending pay for indicted officials

On July 22, a jury found former Georgia Insurance Commissioner Jim Beck (R) guilty on 37 counts of fraud, including mail fraud, wire fraud, money laundering, and tax fraud.

Beck was elected to the office on November 6, 2018, and was suspended from the office by Governor Brian Kemp (R) on May 16, 2019.

The Atlanta Journal-Constitution reported in late January that Beck had been receiving pay and benefits since being indicted for federal wire fraud, mail fraud, and money laundering charges in May 2019. The charges included allegations that Beck stole over $2 million from his former employer, the Georgia Underwriting Association, and used those funds to pay for his 2018 campaign. Because Beck was suspended and did not resign, the state had been compensating him as well as John King, Kemp’s appointment to fill the position during Beck’s suspension.

Following the verdict, insurance commissioner John King said, “The state of Georgia is no longer paying for two commissioners. We took him off the payroll within hours of the jury coming back.”

Beck was placed on house arrest until sentencing, which was set for October 8, 2021.

Voters in Georgia will decide in 2022 whether to amend the state constitution to suspend compensation for the following public officials while suspended from office due to a felony indictment:

1. any member of the General Assembly;

2. Governor;

3. Lieutenant Governor;

4. Secretary of State;

5. Attorney General;

6. State School Superintendent;

7. Commissioner of Insurance;

8. Commissioner of Agriculture; or

9. Commissioner of Labor

Currently, under the state’s constitution, assembly members and public officials who are suspended from office due to the indictment for a felony still receive compensation until they are convicted. Officials that are reinstated to their position would receive pay that was withheld under the amendment.

Candidate filing deadline for school board positions in Ohio is Aug. 4

Candidates interested in running for their local school board in Ohio have until Aug. 4 to file, unless the district held a primary earlier in the year. The general election is scheduled for Nov. 2, and new board members will take office on Jan. 1, 2022.

Ballotpedia is covering elections in 20 Ohio school districts in 2021. Columbus City Schools’ filing deadline was Feb. 3. The remaining 19 districts are:

  • Berea City School District
  • Canal Winchester Local School District
  • Cincinnati Public Schools
  • Dublin City Schools
  • Euclid City School District
  • Gahanna-Jefferson City School District
  • Groveport-Madison Local School District
  • Hamilton Local School District
  • Hilliard City Schools
  • Maumee City School District
  • New Albany-Plain Local School District
  • Olentangy Local School District
  • Pickerington Local School District
  • South-Western City Schools
  • Sylvania City School District
  • Toledo Public Schools
  • Washington Local School District
  • Westerville City School District
  • Worthington Schools

These 19 school districts served a combined total of 220,070 students during the 2016-2017 school year. 

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