Ballotpedia staff

ICYMI: Top stories of the week


Nine states begin general election early voting in September

Forty-five states and Washington, D.C., will conduct no-excuse, in-person early voting for the November elections. Nine states begin early voting in September. Another 33 states and Washington, D.C., begin early voting in October. Three states begin early voting in November. The earliest start date for early voting is Sept. 19 in Pennsylvania.

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Dan Cox wins Republican nomination for governor of Maryland, Democratic primary too close to call

Dan Cox won the Republican nomination for governor of Maryland in Tuesday’s primary. As of this writing, the Democratic primary remained too close to call, with Wes Moore and Tom Perez leading the 10-candidate field.

Voters also decided primaries for one U.S. Senate seat, all eight U.S. House districts, several state executive positions, and all state Senate and state House districts. Find full results at the link below.

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Looking ahead to the August primaries

Sixteen states will hold statewide primaries in August, second only to June when 17 states held primaries. August primaries will take place on six different dates, compared to four in June:

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113 statewide ballot measures certified for the ballot, including new firearms measure in Oregon

As of July 20, 113 statewide measures have been certified for the ballot in 35 states, 27 less than the average number certified at this point in other even-numbered years from 2010 to 2020. One new measure was certified for the ballot last week: Oregon Changes to Firearm Ownership and Purchase Requirements Initiative. The initiative would enact a law outlining a procedure to apply for a permit to purchase a firearm. Signatures have been submitted and are pending verification for another 20 initiatives in 11 states.

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156 state legislators have changed their party affiliations while in office since 1994

Ballotpedia has identified 156 state legislators who have changed their party affiliations while in office since 1994. The most common change has been Democrats switching to become Republicans. Of the 156 changes, 76, or 49%, fall into that category. This is followed by Democrats who switch to a third party or drop their affiliation to become an independent. There have been 27 such changes, representing 17% of the total.

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Union Station: Senate staffers announce formation of New York State Legislative Workers United

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Senate staffers announce formation of New York State Legislative Workers United

Seventy-nine New York State Senate staffers announced the formation of the New York State Legislative Workers United (NYSLWU) and said they intend to seek voluntary recognition from Senate leadership when a majority of staffers sign on.

The unionization effort

In a July 15 public letter to Senate Majority Leader Andrea Stewart-Cousins (D), the staffers wrote

“We are the newly formed New York Legislative Workers United, a collection of staffers in a range of positions representing senate offices across the state. … [W]e write to you today to share our intention to present our union for voluntary recognition, and put our trust that your long history of fighting for the working people of New York will guide your decision making as we take our organizing efforts public. 

“At this stage, we have collected cards from both constituent service staffers and legislative staffers representing multiple regions in the state. Given the nature of our work and the strong culture of union support in New York State, learning our rights as public sector employees under the Taylor Law has been central to our organizing to date[.] … We have retained counsel, and look forward to presenting you with a critical mass of signed cards for voluntary recognition in the near future. … 

“In the coming months, we will share more on our democratically decided demands, anticipated bargaining unit, and timeline for voluntary recognition. At this stage, our intention is merely to make ourselves known, so that we can continue to organize in public without fear of retaliation.”

According to the Albany Times Union’s Chris Bragg, attorneys from Levy Ratner represent the NYSLWU. 

City & State’s Sara Dorn wrote, “Members said talks among staffers began before the pandemic, and the first official meeting was held in January. Union organizers said they hope to enlist a majority of the 700-some staffers before seeking official recognition from the Senate Majority Leader. If the leader recognizes the union, bargaining would begin. If the leader rejects the union, it could file for an election with the Public Employee Relations Board, which requires the support of 30% of all state Senate staffers. A bargaining contract would likely be approved as part of the state budget process, members said.” 

According to Bragg, “New York legislative employees’ jobs do not carry the same civil service protections as many executive branch workers.” 

Democrats have had trifecta control of New York state government since 2019. From 2011 to 2018, Republicans held a majority in the state Senate. The NYSLWU tweeted on July 15, “We are proud to announce both bicameral and bipartisan support for our movement—a movement made up of bicameral and bipartisan staffers and organizers.” 

Gothamist’s Jon Campbell wrote, “The Senate organizing effort comes on the heels of the [New York] City Council staff’s efforts. Staffers won recognition for their union late last year and are currently bargaining for a contract.” According to Dorn, “Organizing members of the state Senate staffers’ union said they have taken guidance from the [New York City Council] union.” 

Legislative staffers in Oregon were the first in the country to unionize when they voted to join the International Brotherhood of Electrical Workers in May 2021. (In Maine, legislative employees who perform nonpartisan duties have been able to unionize since 1999.) Massachusetts legislative staffers began a unionization effort earlier this year. 

Taylor Law questions 

The staffers’ letter said, “We have heard from many corners a false understanding that we do not have the right under state law to unionize[.] … [A]fter careful consultation with a range of legal experts we have learned that we do not need a bill in order to form a union as we are already included within the definition of ‘public employer’ under the Taylor Law.” 

The Taylor Law, or the New York State Public Employees’ Fair Employment Act, governs public-sector labor relations in the state. According to Campbell, “The law lays out a number of public employers whose workers can collectively bargain, but it does not specifically mention the state Legislature.” 

The Empire Center’s Ken Girardin wrote that the question was “far from settled,” saying, “Absent a major change to the Taylor Law (and possibly the state Constitution), any arrangement that binds legislators or a legislative body to the terms of a union contract would raise a list of practical and legal issues, and a union would struggle to get state courts to enforce them.” The Empire Center says it “[promotes] public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.”

William A. Herbert, who directs the National Center for the Study of Collective Bargaining at Hunter College CUNY, said, “The exclusions are specific and there’s nothing under the Taylor Law that excludes legislative employees from unionizing, just as the employees of the judiciary in New York are unionized.”



Astrid Aune, who serves as communications director for Sen. Jessica Ramos (D), said, “People come into this work really intending to do public service in a real way – write bills, serve constituents, get people resources, put money in their neighbors’ pockets. … That drive is very easily taken advantage of. So what we are looking for is some sort of uniformity and structure and really the same rights that we fight for for [sic] our constituents and every other public sector employee to be applied to us.” 

Sen. Julia Salazar (D) tweeted, “Every worker deserves a union, and legislative staff work extraordinarily tough jobs without job security. I support the state senate staff who are organizing as @NYSLWU and seeking to unionize.”

Sen. Jabari Brisport (D) said, “The inherent imbalance of power between individual workers and their bosses is a recipe for unjust treatment; when that boss is a lawmaker, the imbalance of power is even greater and more dangerous.”

Sen. Mike Martucci (R) tweeted, “Proud of this new effort & hope my staff signs on.”


Girardin wrote: “[I]f a union contract were to spell out the hours of operation for the Senate (the way teachers union contracts often regulate the length of the school day), enforcing that would mean interfering with the legislative process—a major separation of powers issue. Of course, nothing can stop lawmakers from voluntarily agreeing to things they or their leadership might negotiate with a union (as members of the New York City Council so far have). Here lawmakers might soon get an unvarnished education about the added costs and reduced flexibility that public-sector collective bargaining has imposed on local governments and school districts for a half-century. And in that specific respect, ending the Legislature’s immunity from collective bargaining could have benefits for all New Yorkers.”

What we’re reading

The big picture

Number of relevant bills by state

We are currently tracking 148 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s) 

Recent legislative actions

No public-sector union bills saw activity this week.

Thank you for reading! Let us know what you think! Reply to this email with any feedback or recommendations.

Previewing Tennessee’s August 4 local ballot measures

Voters in Nashville and Memphis are heading to the polls on August 4 to decide on five amendments to their cities’ charters.

Memphis voters will decide on one charter amendment. If passed, the Memphis measure would increase the term limits of the city council and mayor to three 4-year terms rather than the current two 4-year term limit, allowing them a maximum length in office of 12 years. In 2018, Memphis voters rejected a similar proposal, Ordinance No. 5676, which would have increased the term limits as well. It was defeated by a margin of 60.14% against to 39.86% in favor.

Memphis Mayor Jim Strickland and Councilman Martavius Jones support the measure, arguing that another term would allow them to continue their progress and learn more about the mechanics of the offices they hold. Mayor Strickland said, “If the referendum passes, I will run for a third term. Our team has improved city services, and although we have implemented changes that have improved Memphis, there is more to be done and more to fight to achieve.” Michael Nelson, a political analyst for the Memphis-based Action News 5, called the measure a power grab by Memphis officeholders desiring to keep their positions.

Nashville voters will decide on four charter amendments. Charter Amendment 1 would change the number of signatures required for an initiated charter amendment from 10% of votes at the last general election to 10% of registered voters. This would increase the number of required signatures for proposed charter amendments to qualify for the ballot. Additionally, it defines the duties of the Charter Revision Commission, which must review all proposed charter amendments. Metro Councilmember Bob Mendes supports the measure. He said it’s a solution to reduce “litigation costs and uncertainty related to referendums in Nashville.” 

Nashville Charter Amendment 2 would change the physical qualifications for police officers on the Metro Nashville Police. The qualifications are currently based on Army and Navy requirements. MNPD Member Michael Vaughn characterizes them as outdated because the police force is “getting away from being so militaristic.” The Metro Civil Service Commission would designate new standards if the amendment passes.

Nashville Charter Amendment 3 would establish a metropolitan board of health to oversee the metro public health department. It would set new guidelines for who must sit on the board of health, namely, “one doctor, one mental health expert, one nurse, two other medical professionals, and two non-medical professionals.” The chief medical director position would be renamed the director of health. It also would remove the existing requirement for the director of health to be a medical doctor.

Nashville Charter Amendment 4 establishes a city Department of Transportation and a director of transportation in the charter. The department was created a year ago with the adoption of the Metro Nashville Transportation Plan. It replaced the city’s Department of Public Works.

Early voting has begun and ends on July 30. On election day, polls will be open from 7 a.m. to 7 p.m.

Hall Pass: Your Ticket to Understanding School Board Politics, Edition #22

Welcome to Hall Pass. This newsletter keeps you plugged into the conversations driving school board politics and governance. Each week, we bring you a roundup of the latest on school board elections, along with sharp commentary and research from across the political spectrum on the issues confronting school boards in the country’s 14,000 school districts. We’ll also bring you the latest on school board elections and recall efforts, including candidate filing deadlines and election results.

In today’s edition, you’ll find:

  • On the issues: The debate over which books to include in school libraries 
  • Subscriber survey
  • School board filing deadlines, election results, and recall certifications
  • A brief history of public education in early America
  • Extracurricular: education news from around the web
  • Candidate Connection survey
  • School board candidates per seat up for election

Reply to this email to share reactions or story ideas!

On the issues

In this section, we curate reporting, analysis, and commentary on the issues school board members deliberate when they set out to offer the best education possible in their district.

The debate over which books to include in school libraries

Whether certain books addressing topics related to sex and gender are age-appropriate and ought to be included in school libraries has been a topic of debate in recent months. Debate at school board meetings has often centered on a handful of books, such as Gender Queer: A Memoir

The Chicago Tribune Editorial Board writes that parents and school boards should not seek the removal of books discussing sex and gender, such as Gender Queer: A Memoir and Lawn Boy, from school libraries. The Editorial Board says removing such books would be harmful to students and prevent them from exploring different perspectives and expanding their knowledge. The Board also says the books are not pornographic, so parents do not need to protect their children from the material.

Katelynn Richardson writes that Gender Queer: A Memoir contains sexually explicit material that is not age-appropriate for minors and promotes progressive ideas over educational value. Richardson says removing explicit content from school libraries is not the same as book banning or censorship. She says it is the job of parents to control the books their kids read in the same way they control what movies they watch and what video games they play.

Editorial: Book banning at school libraries blinkers children in the worst way | The Editorial Board, The Chicago Tribune

“It’s too bad proponents of book banning can’t step off their soapboxes long enough to see the matter through the eyes of students — and their own children. School libraries add a unique element to the educational experience. They invite students to an expanse of knowledge, perspective and exploration beyond the bounds of what their district’s coursework offers. … Parents and community members hopping on board the book-banning bandwagon may think they’re safeguarding children — but they’re hurting them. A book that is actually pornographic should never find its way to a school district library shelf, or any public library shelf. But that’s not the case with the books being targeted. Both “Gender Queer” and “Lawn Boy” have received the American Library Association’s Alex Award that annually recognizes 10 books written for adults that have special appeal to youths ages 12 through 18. By calling for their removal — or incineration — conservatives are blinkering kids in the worst way.”

Removing explicit content from school libraries is not ‘book banning’ | Katelynn Richardson, The Washington Examiner

“People are sensitive to book banning. That’s a good thing. But special considerations apply to the catalogs in school libraries. It’s foolish to pretend, like the librarians featured in today’s New York Times story, that removing books like Gender Queer: A Memoir from schools due to sexually explicit material is a slippery slope to censorship. … Librarians would be in the spotlight less if they did their job and selected age-appropriate books that provide educational value, rather than ones that promote a progressive social agenda. I have no sympathy for anyone who loses her job because she wanted to put pornographic material within the reach of minors. While not a license for harassment, it’s absolutely fair for parents to question decisions, speak out at school board meetings, and publicly push back. This is not about viewpoint diversity. It’s about protecting children. Parents have always had the responsibility for overseeing what their children are exposed to: in movies, video games, activities, social life, and yes, books.”

Tell us what’s happening in a school district near you!  

We’re still accepting responses to our survey on teacher staffing. We want to hear from you! 

School districts around the country face diverse issues and challenges. We want to hear what’s happening in your school district. Complete the very brief survey below and we may share your response with fellow subscribers in an upcoming newsletter.

Today’s question

News outlets have reported that some districts face a teacher shortage heading into the 2022-2023 school year. Is this an issue in a school district near you? What challenges does it present for the district? How is the district dealing with these challenges, if they exist?

Click here to respond!

School board update: filing deadlines, election results, and recall certifications

Ballotpedia has historically covered school board elections in about 500 of the country’s largest districts. We’re gradually expanding the number we cover with our eye on all of the roughly 14,000 districts with elected school boards.

Election results from the past week


We covered the following school board elections on July 19.

States with school board filing deadlines in the next 30 days   


  • Four seats on the Ann Arbor Public Schools school board are up for election Nov. 8. The filing deadline is July 26. 

New Jersey

  • Three seats on the Jersey City Public Schools school board are up for election Nov. 8. The filing deadline is July 25. 

Upcoming school board elections


We’re covering the following school board general elections on Aug. 4.


We’re covering the following school board primary elections on Aug. 9.

A brief history of school boards in early America

There are over 13,000 public school districts in the United States, most of them overseen by elected school board officials. But that hasn’t always been the case. Go back far enough and you’ll find a time when public education was virtually nonexistent. Today, we’re going to look at the development of school districts and school boards from the colonies through the beginning of the 19th century. We’ll be back in a future edition to continue our look at the development of public education through to the present.

Contemporary public education finds its clearest and most direct origins in 17th-century New England colonies. At the time, a widespread belief in the colonies and Europe was that education was a private concern. Sir William Berkeley, the governor of Virginia, said in 1671 that Virginia, in not providing free education, was following “the same course taken in England out of towns; every man according to his own ability in instructing his children.” But in New England, towns and eventually the Massachusetts Bay Colony General Court had started taking public action related to education decades earlier.

Boston was the site of the country’s first public school. City officials hired a schoolmaster in 1635 to run the Boston Latin Grammar School. According to Wayne J. Urban and Jennings L. Wagoner, Jr. in their book American Education: A History, “Within the first decade of settlement, seven of the twenty-two towns in Massachusetts had taken some public action on behalf of schooling.”

In 1642, the Massachusetts Bay Colony General Court passed a law requiring the head of the household to provide education for his children in the home. In 1647, the General Court passed a law requiring towns to provide children with education. The purpose of the law—known as the Old Deluder Satan Act of 1647—was to ensure among other things that all people were literate enough to read the Bible. The law required towns with 50 or more families to hire a teacher for the purpose of teaching reading and writing. Towns with 100 or more families were required to maintain grammar schools. The law, reflecting a subtle shift away from the belief that education was merely a private concern, specified that towns could be fined for noncompliance.

The Massachusetts law did not establish compulsory schooling or require towns to pay the full cost of providing education. In most cases, families paid some amount of money in the form of tuition. 

Town meetings were the primary way early public schools in New England were managed. Over time, responsibility for the day-to-day operations of schools fell to selectmen, the town government’s executive committees, and later to committees appointed to inspect school performance and make hiring and firing recommendations. These committees operated as a kind of early school board. According to Northwestern Law Professor Nadav Shoked, the committees arose because of “the town meeting’s inability to provide specialized and ongoing administration.” 

A similar school governing structure spread beyond Boston through the colonial period. Shoked writes that “Wherever public education was introduced, a separate body to govern schools emerged.” 

Public support for education developed haltingly throughout the rest of the country, with some colonies—and, later, states—advancing public education more quickly than others. According to University of South Carolina School of Law Professor Derek W. Black, “Public education in the North had taken hold in the late 1700s and early 1800s and had developed substantially by the eve of the war. But in the South, before Reconstruction, education was only sporadically available through the patchwork efforts of public, private, and religious institutions.” In 1779, Thomas Jefferson proposed a system of publicly-funded grammar schools in the Virginia General Assembly. “A Bill for the More General Diffusion of Knowledge” failed to pass. A revised bill, “An Act to Establish Public Education,” passed in 1796. 

Six of the original 13 states mentioned education in their constitutions—Connecticut, Georgia, Massachusetts, North Carolina, Pennsylvania, and Rhode Island. 

The Congress of the Confederation approved ordinances in 1785 and 1787 that, in addition to setting procedures for admitting new states, set aside a portion of the land in the Northwest Territories for schools.

The Constitution, ratified in 1788, did not mention education.   

In 1789, the Massachusetts General Court passed the Massachusetts Education Act. The law adopted and reaffirmed many of the practices that had been commonplace in schools in towns like Boston, such as separate town committees charged with overseeing schools. The law also recognized, for the first time in the country’s history, the school district as a distinct legal entity. Throughout the 19th century, state courts would affirm the legal independence of the school district. Shoked writes that “by the nineteenth century’s final quarter, the school district’s status in American law, as a politically separate entity with secure governing powers, was unassailable.” 

We’ll be back in a future edition to look at the development of districts and school board governance from the rise of the common school movement in the 1830s to the present.

Extracurricular: education news from around the web

This section contains links to recent education-related articles from around the internet. If you know of a story we should be reading, reply to this email to share it with us! 

Take our Candidate Connection survey to reach voters in your district

Today, we’re highlighting survey responses from the upcoming Aug. 4  Metropolitan Nashville Board of Education school board general elections in Tennessee. Four seats are up for election. The primary was May 3. 

Today, we’re featuring responses from Erin O’Hara Block (D), who is running to represent District 8, and Kelli Phillips (R), who is running to represent District 4. 

Here’s how O’Hara Block answered the question, “Please list below 3 key messages of your campaign. What are the main points you want voters to remember about your goals for your time in office?

  • “The top priority for MNPS in the coming years is a daily focus on recovery, in both academics and mental health. After three years of disrupted schooling, students are struggling to learn and teachers struggling to teach when trauma, grief, and other mental health needs go unaddressed. As a board member, I will rally school leaders, school district officials, community members, and city leadership to ensure Nashville creates integrated systems to support the mental health of students and educators both inside and outside of school.
  • “Investing smartly to solve problems. This means ensuring we have the funding that we need to support our schools. We also must focus on the goals of the district AND individual needs of individual schools. Strategic focus on the district’s most pressing problems – early literacy, middle grades math, and preparation for college and career – will lead to progress.
  • “Creating great schools through strong leaders, teachers, and staff. A great school starts with the people in the building and we need to ensure the district provides the resources and structures to recruit, compensate, develop, support and retain high-quality teachers, leaders, counselors, and support staff for every school.”

Click here to read the rest of O’Hara Block’s answers. 

Here’s how Phillips answered the question, “Please list below 3 key messages of your campaign. What are the main points you want voters to remember about your goals for your time in office?

  1. “LISTEN to parents and ensure their voice is heard when all board decisions are made about our schools – including masks.
  2. “END Critical Race Theory being taught in schools and the many ways politicians seek to push it via political learning such as the English “Wit and Wisdom” curriculum our schools are using
  3. “FOCUS on what matters – better student outcomes in core subjects such as English, Math and Science.”

Click here to read the rest of Phillips’ answers.

If you’re a school board candidate or incumbent, click here to take the survey. The survey contains more than 30 questions, and you can choose the ones you feel will best represent your views to voters. If you complete the survey, a box with your answers will display on your Ballotpedia profile. Your responses will also appear in our mobile app, My Vote Ballotpedia. If you’re not running for school board but there is an election in your community this year, share the link with the candidates and urge them to take the survey!

Checks and Balances- July 2022

The Checks and Balances Letter delivers news and information from Ballotpedia’s Administrative State Project, including pivotal actions at the federal and state levels related to the separation of powers, due process, and the rule of law.

This edition: 

In this month’s edition of Checks and Balances, we review the United States Supreme Court’s (SCOTUS) recent decision affecting Chevron deference and the major questions doctrine; new federal legislation aiming to make task force guidance subject to the Congressional Review Act (CRA); and the continued revival of sue and settle at the Environmental Protection Agency (EPA). 

At the state level, we take a look at a court case challenging a California ballot measure’s effect on pork production in other states as well as a recent court decision arguing that bumblebees are, in fact, fish.

We also highlight a new article from administrative law scholar Joseph Postell examining the ambiguity of expertise in the administrative state. As always, we wrap up with our Regulatory Tally, which features information about the 199 proposed rules and 279 final rules added to the Federal Register in June and OIRA’s regulatory review activity.

In Washington

SCOTUS rolls out major questions doctrine, stays silent on Chevron 

What’s the story?

The United States Supreme Court in June issued decisions in two administrative law cases concerning judicial review of agency actions. While the court officially ushered in the major questions doctrine, it stayed silent on the future of Chevron deference.

In West Virginia v. Environmental Protection Agency, the court formally invoked the major questions doctrine for the first time to limit the scope of powers granted to the Environmental Protection Agency (EPA) through the Clean Air Act to regulate greenhouse gas emissions. The justices ruled 6-3 that, according to the major questions doctrine, the regulation of greenhouse gas emissions constitutes a significant policy question that should be determined by elected lawmakers in Congress rather than by agency staff. Post-decision commentary questioned how the decision could affect other delegations of authority and whether the major questions doctrine would replace Chevron deference as the court’s preferred tool for reviewing challenges to agency authority.

In Biden v. Texas, the court ruled 5-4 to uphold the U.S. Department of Homeland Security’s memoranda ending the Migrant Protection Protocols (MPP) program as a lawful final agency action consistent with federal immigration law and the Administrative Procedure Act (APA)—allowing the Biden administration to move forward with its plan to end the MPP. The decision in the case helped clarify the scope of agency discretion regarding immigration policy as well as the types of agency actions that the court considers to be final agency actions pursuant to the APA.

Want to go deeper?

Senators propose broadening the Congressional Review Act’s scope

What’s the story? 

U.S. Senator Dan Sullivan (R-Alaska) on June 16, 2022, introduced the Checks and Balances Act (S. 4427), which proposes to amend the Congressional Review Act (CRA) to make guidance issued by presidential task forces subject to a resolution of disapproval—a process that allows members of Congress to vote to nullify certain federal agency rules.

Sullivan stated that he authored S. 4427 in response to the Government Accountability Office’s (GAO) March determination finding that Congress cannot apply the CRA to President Biden’s coronavirus (COVID-19) vaccine mandate for federal contractors. GAO argued that the mandate did not qualify as a reviewable agency action for purposes of the CRA because President Biden’s Executive Order 14042 had directed the Safer Federal Workforce Task Force—rather than a federal agency—to bring about the mandate. GAO also claimed that the director of the Office of Management and Budget (OMB) “stepped into the shoes of the President and exercised his delegated discretionary authority when approving the Guidance, meaning OMB was not acting as an agency under CRA.”

Sullivan disagreed with the GAO’s reasoning, arguing in a press release that guidance issued by such presidential task forces, like the vaccine mandate for federal contractors, constitute “glaring loopholes in federal law.” He further argued that “Congress has a duty to check the President’s power in this area.”

U.S. Senators Cindy Hyde-Smith (R-Miss.), Steve Daines (R-Mont.), Roger Marshall (R-Kan.), and Mike Braun (R-Ind.) cosponsored the bill.

Want to go deeper?

EPA continues sue and settle revival

What’s the story?

The U.S. Environmental Protection Agency (EPA) on May 23, 2022, demonstrated its renewed commitment to sue and settle by giving notice of a proposed a consent decree establishing a timeline for the agency to publish updated 2023 biofuel blending requirements. 

Sue and settle is a term used to describe cases in which an outside group sues a federal agency in order to reach a settlement that is favorable to the regulatory goals of both. While EPA officials during the Trump administration prohibited sue and settle, describing it as “regulation through litigation,” Biden officials later reinstated the practice, referring to sue and settle as a “practical, economical and efficient path forward” for the EPA.

The EPA’s May consent decree aims to settle a lawsuit brought by the biofuel trade association Growth Energy in which the group asked the federal courts to set a timeline for the EPA to publish updated biofuel blending requirements for 2023. The settlement requires the EPA to propose 2023 requirements no later than September 16, 2022, and finalize those requirements by April 28, 2023.

Want to go deeper?

In the states

SCOTUS to examine effect of California pork regulations on interstate commerce

What’s the story? 

A case scheduled for argument before the U.S. Supreme Court during the upcoming term questions whether a California ballot measure regulating the in-state sale of pork products unlawfully regulates pork producers in other states. National Pork Producers Council v. Ross could clarify whether such state-specific actions, which can carry widespread regulatory implications for other states, violate federalism principles and the dormant Commerce Clause.

California voters in 2018 passed Proposition 12, which prohibited the sale of pork products in the state unless pork producers house their livestock according to certain space requirements and directed state agencies to issue implementing regulations. Plaintiffs in the case claim that California voters, who consume 13% of the nation’s pork but raise roughly 0.13% of the nation’s breeding herd, effectively forced out-of-state farmers to follow California’s agriculture regulations rather than the regulations in their own states. Such state action, according to plaintiffs, violates federalism principles and the dormant Commerce Clause—a legal doctrine derived from the Constitution’s Commerce Clause that bars states from passing legislation that ostensibly regulates interstate commerce.

The U.S. Department of Justice in June filed an amicus brief in support of pork producers, arguing in part, “​​States may not otherwise regulate out-of-state entities by banning products that pose no threat to public health or safety based on philosophical objections to out-of-state production methods or public policies that have no impact in the regulating State.” 

Wayne Pacelle, president of the nonprofit groups Animal Wellness Action and the Center for a Humane Economy, disagreed with the Biden administration’s position. He told the San Francisco Chronicle, “It is shocking that the Biden administration is attacking the rights of states to enact anti-cruelty and food safety laws that are nonexistent at the federal level … The state’s interest in protecting the interests of Californians could not be clearer.”

Want to go deeper?

California court claims insects are fish to uphold bumblebee regulation

What’s the story? 

The California Third District Court of Appeals of May 31, 2022, upheld a broad interpretation of the California Endangered Species Act (CESA) that allows the California Fish and Game Commission to consider bumblebees as fish under the meaning of the act and, therefore, to list them as endangered species. 

The CESA speaks to birds, mammals, fishes, amphibians, reptiles, and plants, but is silent on insects. The California Fish and Game Commission in 2019 nonetheless accepted a petition to list four bumblebee species as endangered. Agricultural groups sued and Judge James P. Arguelles of the Superior Court of Sacramento County overturned the listing in Almond Alliance of California v. Fish and Game Commission, arguing that the CESA does not cover insects. 

The court of appeal disagreed, finding that the state legislature had intended that the CESA cover insects since lawmakers had previously defined “fish” in the state’s Fish and Game Code to mean “a wild fish, mollusk, crustacean, invertebrate, amphibian, or part, spawn, or ovum of any of those animals.” The court further argued that the word “invertebrate” in the Fish and Game Code definition does not strictly refer to aquatic species, stating, “Although the term fish is colloquially and commonly understood to refer to aquatic species, the term of art employed by the Legislature in the definition of fish in section 45 is not so limited.”

Plaintiffs in the case can appeal the decision to the California Supreme Court. No further action had been taken as of July 14, 2022.

Want to go deeper?


Examining the ambiguity of administrative expertise

A recent article in Social Philosophy and Policy from administrative law scholar Joseph Postell aims to examine the role of expertise in the administrative state: what is it, who wields it, and how it affects policy making. In “The Ambiguity of Expertise in the Administrative State,” Postell argues that the Progressive Era view favoring the separation of politics and administrative expertise was abandoned by the mid-twentieth century, resulting in continued ambiguity surrounding the notion of agency expertise:

“In short, the principle of rule by experts occupies a central but ambiguous place in the Progressives’ political theory, and in the administrative state that they founded. This essay describes the Progressives’ writings and views on the idea of expert rule in the administrative state. It then explains how the ambiguity in that idea led to political and theoretical problems that Progressives never fully resolved. These problems occupied and divided Progressives during the 1912 presidential election and throughout the 1910s and 1920s. The New Deal saw Progressives abandon the idea of neutral expertise in favor of a theory of presidential management of administration, and scholars of political science and public administration largely abandoned the separation of politics and administration by the mid-twentieth century. This leaves the place of expertise in the administrative state unclear still today. The administrative state requires both neutral expertise and democratic legitimacy but has never fully reconciled the tensions between these principles.”

Want to go deeper

  • Click here to read the full text of “The Ambiguity of Expertise in the Administrative State” by Joseph Postell. 


Regulatory tally

Federal Register

Office of Information and Regulatory Affairs (OIRA)

OIRA’s June regulatory review activity included the following actions:

  • Review of 38 significant regulatory actions. 
  • Four rules approved without changes; recommended changes to 32 proposed rules; one rule withdrawn from the review process; one rule subject to a statutory or judicial deadline.
  • As of July 1, 2022, OIRA’s website listed 119 regulatory actions under review.
  • Want to go deeper? 

Economy and Society: July 19, 2022- Missouri Treasurer challenges ESG impact on public pensions

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.

ESG Developments This Week

In Washington, D.C.

The SEC undoes Trump administration rules on proxy advisory services

On July 13, the Securities and Exchange Commission (SEC) voted to undo rules placed on proxy advisory services during the Trump administration. The advisory services – and especially the two dominant services, Institutional Shareholder Services (ISS) and Glass-Lewis – have long been considered among the key players in the ESG universe. The SEC agreed with the advisory services that the rules were, in their view, unduly burdensome and inhibited their ability to act independently. Reuters reported as follows:

“The U.S. securities regulator voted on Wednesday to rescind rules introduced under former President Donald Trump that critics said impeded the independence of firms that advise investors on how to vote in corporate elections.

The move is the latest installment in a long-running battle over how to regulate proxy advisers like Institutional Shareholder Services and Glass Lewis, which advise investors how to cast their ballot on issues including the election of directors, merger transactions and shareholder proposals….

In 2020, the SEC introduced rules that increased proxy advisers’ legal liability and required them to share recommendations early on with corporate executives. Investor advocates said the changes tilted the scales in favor of corporate bosses over investors.

Wednesday’s rules specifically rescind two exemptions, including a requirement that proxy advisers provide a first look to corporations of the advice to be placed on the agenda. It also removes a requirement that allowed clients of proxy firms to be notified of any written responses to their advice from companies.

The SEC, whose composition has changed under President Joe Biden, first proposed these rule changes in November and said investors had expressed concerns that the conditions created increased compliance costs for proxy advisers and impaired the independence and timeliness of their advice….

“While we applaud the Commission for removing some of the 2020 rule’s more draconian provisions, the rule should have been rescinded in its entirety,” ISS said in a statement.

Not everyone welcomed the changes.

“The SEC has offered no justification for abandoning a decade’s worth of bipartisan, consensus-driven policymaking,” said Jay Timmons, chief executive of the National Association of Manufacturers, adding that his group would be filing a lawsuit in the coming weeks to “protect manufacturers from proxy advisory firms’ outsized influence.””

An SEC proposal aims to make it easier for activists to weigh in

Also on July 13, the SEC proposed a rule that would make it more difficult to keep shareholder proposals off their proxy statements. If enacted, the rule would strengthen activists’ positions, making it more difficult for corporations to dismiss them and their proposals. And while the new rule would apply to all proposals, not just to those introduced by ESG-inspired activists, analysts nevertheless view this as a victory for ESG:

“The Securities and Exchange Commission on Wednesday proposed expanding investors’ ability to resubmit proposals on environmental, social and governance issues as the 2022 proxy season sees record levels of votes and Republicans ramp up criticisms of the agency.

The agency voted 3-2 to propose amending a provision known as Rule 14a-8, to require companies to jump through additional hoops when seeking to prevent shareholders from voting on corporate proposals.

If finalized, the changes would likely make it much harder for companies to avoid votes on ESG matters in the future.

The rule as currently written allows shareholder proposals to be excluded if companies say they have been “already substantially implemented,” that they “substantially duplicate” another current proposal, or that they substantially duplicate a proposal that was previously submitted at the company’s prior shareholder meetings, according to the agency.

The SEC proposed amending each of these options so that companies would have to meet a higher bar….

During an open meeting Wednesday, SEC Chairman Gary Gensler said the amendments would provide much-needed clarity. The SEC received more than 700 requests to block shareholder resolutions in the last three proxy seasons, according to the agency. Nearly half of those requests used at least one of the three arguments.

“I believe these proposed amendments would provide a clearer framework for the application of this rule, which market participants have sought,” Gensler said. “They also would help shareholders exercise their rights to submit proposals for consideration by their fellow shareholders.”

Republican commissioners Hester Peirce and Mark Uyeda, who was sworn into the agency last month, voted against the change. Both said the move is another example of regulatory whiplash as the SEC unwinds or mitigates actions taken during the Trump administration.

Peirce said the proposal would force executives to rehash old issues year-after-year, “narrowing companies’ ability to exclude proposals.””

WSJ: “SEC’s Gensler Casts Doubt on Prospects for China Audit Deal” 

Lastly, on July 13, SEC Chairman Gary Gensler sounded pessimistic about reaching a deal with the People’s Republic of China on company audits. For years, according to analysts, American capital markets have questioned the validity of self-reported corporate data from China and have argued that the lack of a substantive, verifiable audit process gives Chinese companies an unfair advantage over those from other nations.

In 2020, Congress passed and President Trump signed the Holding Foreign Companies Accountable Act, which will require American exchanges to de-list companies that do not permit their audits to be checked by external authorities.

According to proponents, the urgency of validating foreign corporate audits will take on far greater pertinence when the SEC issues its final rule on climate disclosures. If investors and legislators feel that U.S. companies are disadvantaged by traditional financial audit discrepancies, then that sentiment is likely to grow when U.S. companies are forced to conduct environmental audits as well, they argue. The Wall Street Journal reported:

“Securities and Exchange Commission Chairman Gary Gensler expressed doubt Wednesday that negotiators in Washington and Beijing will reach an agreement over audits that is necessary to prevent Chinese companies from being delisted by U.S. stock exchanges.

Talks between the two countries had intensified in recent months ahead of a looming deadline for American regulators to gain access to Chinese companies’ audit papers as required under U.S. law. Chinese authorities had become vocal in recent months about their desire to avoid the delisting consequence of missing the deadline….

“It’s quite possible that there’s no deal here,” Mr. Gensler told reporters after an SEC rule-making meeting. “I’m not particularly confident.”

The HFCAA took effect in 2021 and bans U.S. trading of securities of companies whose auditors can’t be inspected by the American audit watchdog for three consecutive years. That gives Chinese companies until spring 2024 to comply, though Congress is weighing bipartisan legislation that would shorten the deadline by a year.

The SEC has identified about 150 companies as noncompliant following the release of their latest annual reports, including Chinese e-commerce giants Inc. and Pinduoduo Inc. and restaurant operator Yum China Holdings Inc.

Chinese authorities have long cited national-security concerns as the basis for declining to allow the U.S. Public Company Accounting Oversight Board, or PCAOB, full access to company audit papers.

At the heart of the dispute are profound differences in the two countries’ understanding of what information threatens national security. U.S. officials say company audit papers should not contain anything sensitive. But for China’s authoritarian government, uncensored information of any sort is a risk. Data from large Chinese companies could, for instance, provide insights into the nation’s economy that aren’t available in tightly controlled government reports.

Officials at the SEC and PCAOB have repeatedly said they have little wiggle room under the law to make accommodations for Chinese firms….

In anticipation of the potential delisting from U.S. exchanges, many U.S.-listed Chinese companies have pursued alternative listings in Hong Kong, but their trading volumes in the Asian financial hub still trail their American counterparts.”

In the States

Missouri Treasurer asks the legislature to address ESG influence on public pensions

Last week, Missouri Treasurer Scott Fitzpatrick (R) – who is currently campaigning to be the state’s next auditor – pled with state legislators to address ESG, which he argues has harmful consequences for the state:

“The Missouri legislature needs to examine who is making investments of taxpayer funds held in public pensions, according to the state treasurer.

Scott Fitzpatrick, a candidate for the Republican nomination for state auditor, highlighted his concern during a recent visit to St. Louis. He believes a top legislative priority should be acting on the state’s investment relationships with any Environmental, Social and Governance (ESG) Funds through public pension systems.

“I think the legislators should work on legislation to address the impacts of ESG investing and make sure that state pension plans are not allowing their assets to be voted by asset managers that are advancing a woke political agenda,” Fitzpatrick, who was elected to a full term as treasurer in November 2020, said in an interview with The Center Square. “We’re seeing that in companies like Black Rock.”

Last month, Fitzpatrick distributed a media release in an effort to protect the Missouri State Employees’ Retirement System’s investments “from being used by activist investment managers to advance left-wing social and political causes, which are harmful to shareholders and violated their fiduciary obligations to Missourians.”

Fitzpatrick said state government must take back control of how funds are being managed and proxy votes cast….

Fitzpatrick predicted the federal government will embrace more ESG initiatives through the Federal Deposit Insurance Corp., SEC, the Department of Labor, the Environmental Protection Agency and other rule-making organizations.”

On Wall Street and in the private sector 

Best-returning ESG fund is cautious and contrarian

The top-returning emerging-markets ESG fund managed to outperform its competitors by a wide margin over the last six months by adopting an unusual strategyavoiding the hot tech names:

“The top-performing ESG fund for emerging markets surpassed its peers in the first half of 2022 by adopting a low-risk strategy that rejected tech companies Tencent Holdings Ltd., Alibaba Group Holding Ltd. and Taiwan Semiconductor Manufacturing Co. Ltd.

The Robeco QI Emerging Conservative Equities fund declined 4.9% this year, while the 15 largest actively managed ESG-labeled emerging market equity funds plunged about 23% on average, according to data compiled by Bloomberg.,,,

Top holdings in Robeco’s $2.2 billion fund are Samsung Electronics Co. Ltd., Infosys Ltd. and Bank of China Ltd. By comparison, TSMC ranks as the largest investment for all of the other biggest ESG emerging markets funds, which also have sizable stakes in Tencent and Alibaba. Shares of TSMC, Tencent and Alibaba have fallen as much as 26% this year amid rising global concerns about inflation and slowing economies.

Tech and financials are the biggest holdings in all of the biggest 15 funds, which also focus on four countries — China, Taiwan, South Korea and India. The funds largely avoid markets in Latin America, Africa and other emerging regions. This bias can divert greener capital that poorer countries need to decarbonize their economies and raise living standards….

Rotterdam-based Robeco said its fund’s success reflects a strategy of hand-picking stocks that are considered low risk and perform well over longer time horizons, and a willingness to deviate from its benchmark — the MSCI Emerging Markets Index — by as much as 10%.”

ICYMI: Top stories of the week


Eighty-seven seats on state supreme courts are up for election this year

That figure represents 25% of all state supreme court seats. Here’s a rundown of what you can expect this November:

  • Retention elections will be used for 44 judicial elections this year, while contested elections will be used for 43 judicial elections.
  • Of the 87 judges up for election this year, 66 are officially nonpartisan. Thirteen justices up for election are Republicans and eight are Democrats.

Read more

Previewing this year’s state legislative elections

Eighty-eight of the country’s 99 state legislative chambers are holding regularly-scheduled elections on Nov. 8. This includes 6,166—84%—of the country’s 7,383 state legislative seats. Based on information from 34 states analyzed to date, there are more open state legislative seats this year than at any point in the past decade. Roughly 24% of all state legislative seats up for election—1,048—are open, guaranteeing those seats to newcomers.

Read more

Previewing this year’s U.S. House elections

All 435 seats in the U.S. House are up for election this year, along with the seats of five of the chamber’s six non-voting members. Democrats maintained their majority following the 2020 elections, winning 222 seats to Republicans’ 213. Democrats hold a 220-210 majority with five vacant seats. Republicans need to gain a net of eight seats to win a majority.

Read more

309 state executive offices on the ballot in 44 states

This year, there are 309 state executive offices on the ballot in 44 states. This figure includes 36 gubernatorial elections, 30 for attorneys general, and 27 for secretaries of state. 

Republicans currently hold 152 of these offices, Democrats hold 124, and 33 are either nonpartisan or are held by a third-party or independent officeholder.

Read more

Union Station: National ICE Council will separate from American Federation of Government Employees

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National ICE Council will separate from American Federation of Government Employees

The American Federation of Government Employees (AFGE) announced on July 12 that it had filed paperwork with the Federal Labor Relations Authority (FLRA) to relinquish its representational interest in AFGE Council 118, the National ICE Council, which represents U.S. Immigration and Customs Enforcement employees. 

About the separation 

According to The Washington Times‘ Stephen Dinan, the National ICE Council filed a complaint seeking financial independence from AFGE and the AFL-CIO with the Department of Labor in June. Dinan wrote, “The council says it cannot get adequate representation from the two organizations, which ‘foster hate and prejudice’ against U.S. Immigration and Customs Enforcement and have backed political candidates who call for defunding ICE[.] … The council accuses the two labor groups of holding ICE employees captive. It says the parent unions, wanting to garner ‘partisan political favor’ from the administration, refuse to let the employees manage their own affairs but won’t advocate for them.”

According to Dinan, “The complaint ask[ed] the Labor Department, which oversees labor relations, to impose a full financial audit of the two parent unions, to grant financial independence to the council, and to ensure ‘protections’ from retaliation by the AFGE or AFL-CIO.” 

National ICE Council President Chris Crane said, “I am not aware of any other union that openly campaigns to have the jobs of its members eliminated. … When AFGE supports electing abolish-ICE politicians to positions of power and influence, that’s exactly what it’s doing.” 

On July 12, AFGE announced it had “begun the process to separate a unit of thousands of Immigration and Customs Enforcement (ICE) officers in the Department of Homeland Security (DHS) from the parent union, AFGE, by filing paperwork with the Federal Labor Relations Authority (FLRA) disclaiming interest in the unit. … Under the Federal Labor Relations Act, unions can volunteer to give up a unit of workers they previously represented by filing a disclaimer of interest in the bargaining unit. The disclaimer is subject to a routine investigation and approval by the FLRA.” 

According to the FLRA’s Representation Case Handling Manual, “Any labor organization holding exclusive recognition for a unit of employees may disclaim any representational interest in those employees at any time.” 

AFGE National President Everett Kelley stated, “It is clear that the AFGE Council 118 remains steadfast in their desire to no longer be a part of AFGE or the broader labor movement. … As a result, we have made the difficult decision to disclaim interest in this unit. While we had hoped to avoid this outcome, today’s action begins the process of granting Council 118’s request.”

According to Government Executive’s Erich Wagner, “An AFGE official [said] staff on the national level [had] engaged in ‘multiple discussions’ with the ICE council … to convince them to remain part of the union but were unsuccessful.”

What happens next

According to Wagner, “Once the process is complete, the ICE council would not automatically become independent. Instead, the bargaining unit itself is disbanded, and all collective bargaining agreements between AFGE Council 118 and the agency are voided. … [E]mployees at the agency would have to conduct an entirely new organization drive, whether it be independently or in coordination with another federal employee union. Following a new bargaining unit designation and election overseen by the FLRA, the newly reconstituted union would then have to undergo the lengthy process of negotiating a new collective bargaining agreement with ICE management from scratch.”

The National ICE Council says it represents “approximately 7,600 Officers, Agents and employees who work for the U.S. Immigration and Customs Enforcement throughout the continental United States, Alaska, Hawaii, Puerto Rico, The Virgin Islands, Guam, and Saipan.”

What we’re reading

The big picture

Number of relevant bills by state

We are currently tracking 148 pieces of legislation dealing with public-sector employee union policy. On the map below, a darker shade of green indicates a greater number of relevant bills. Click here for a complete list of all the bills we’re tracking. 

Number of relevant bills by current legislative status

Number of relevant bills by partisan status of sponsor(s) 

Recent legislative actions

No public-sector union bills saw activity this week.

Thank you for reading! Let us know what you think! Reply to this email with any feedback or recommendations.

Economy and Society- July 12, 2022: ESG pulling Europe in opposite directions

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.

ESG Developments This Week

In Washington, D.C., and around the world

ESG pulling EU and the European Central Bank in opposite directions

While farmers in the Netherlands continue protests against new energy and fertilizer protocols, European Union regulators in Brussels and Frankfurt, respectively, appear to be moving in opposite directions on ESG-related matters.

On July 6, the European Union accepted the pleas made most notably by Germany and agreed to keep natural gas and nuclear energy in its green or sustainable energy classification – much to the chagrin of many in the Union. The EU decision was frustrating to many in the coalition:

“The European Union voted on Wednesday to keep some specific uses of natural gas and nuclear energy in its taxonomy of sustainable sources of energy.

Europe’s taxonomy is its classification system for defining “environmentally sustainable economic activities” for investors, policymakers and companies. This official opinion of the EU matters because it affects funding for projects as the region charts its path to address climate change. In theory, the taxonomy “aims to boost green investments and prevent ‘greenwashing,’” according to the EU’s parliament.

The vote on natural gas and nuclear energy follows one that was passed in February, which amounted to a referendum on what had been a particularly controversial piece of the ruling. Natural gas emits 58.5% as much carbon dioxide as coal, according to the U.S. Energy Information Association. Nuclear power does not generate any emissions, though it draws criticism surrounding the problem of storing radioactive waste….

The EU is still required to reduce greenhouse gas emissions by at least 55% at the end of the decade and to become climate neutral in 2050, in accordance with European Climate Law. But Wednesday’s vote shows that at the same time the EU wants to encourage private investment in natural gas and nuclear as the region makes the transition from fossil fuels, particularly coal, to clean energy….

There was a flurry of opposition to the decision.

Some observers objected to the fact that continuing to use natural gas means an ongoing dependence on Russian energy.

“I’m in shock. Russia’s war against Ukraine is a war paid for by climate-heating fossil fuels and the European Parliament just voted to boost billions of funding to fossil gas from Russia,” Svitlana Krakovska, a Ukrainian scientist on the Intergovernmental Panel on Climate Change, said in a statement shared by the European Climate Foundation, a philanthropic advocacy initiative that fights climate change.

Others say the inclusion of natural gas in the taxonomy undermines its goal to prevent greenwashing.

“With gas in the Taxonomy, the European Union has missed its chance to set a gold standard for sustainable finance. Instead, it has set a dangerous precedent. Politics and vested interests have won over science,” said Laurence Tubiana, CEO of the European Climate Foundation, in a statement.”

Meanwhile, in Frankfurt, the European Central Bank moved in the other direction on green investments, agreeing to clean up its investment portfolio – although it too struggled with criticism leveled by advocates of more aggressive action:

“The European Central Bank will shift the corporate bonds it owns and accepts as collateral away from the most carbon-intensive companies, going further than most big rate-setting authorities but disappointing activists eager to see stronger measures.

Announcing plans to “tilt” its €386bn portfolio of corporate bonds away from companies with “a poorer climate performance”, the ECB said it “aims to gradually decarbonise its corporate bond holdings” in line with the 2015 Paris Agreement to limit global warming.

The central bank said it would also limit the share of non-financial corporate bonds with a “high carbon footprint” it accepts as collateral from individual counterparties, while requiring climate risk disclosure to hit certain levels before an asset or loan is accepted as collateral.

ECB president Christine Lagarde, who has made fighting climate change a key focus of her leadership, said: “Within our mandate, we are taking further concrete steps to incorporate climate change into our monetary policy operations.”

She added “there will be more steps” in future to align the ECB’s activities with the Paris Agreement to limit global warming to 1.5C since pre-industrial times. Temperatures have already risen at least 1.1C….

However, campaigners expressed disappointment that the ECB had not gone further. Greenpeace finance expert Mauricio Vargas said the measures announced on Monday were “overdue”, adding that the ECB “should actively sell the bonds of companies, like the big fossil fuel groups, that are not aligned with the goals of the Paris Agreement”….

The ECB on Monday defended the measures, however, saying they “aim to better take into account climate-related financial risk in the eurosystem balance sheet and, with reference to our secondary objective, support the green transition of the economy in line with the EU’s climate neutrality objectives”.

The shift in its corporate bond portfolio will come into force in October and will only affect how it reinvests the proceeds of maturing bonds it already owns after it stopped expanding its balance sheet last week.”

On Wall Street and in the private sector 

Abortion becomes an ESG issue

In the wake of the Supreme Court’s decision in the Dobbs case, which overturned Roe v. Wade and threw the question of legal abortion back to the states, corporations are also being asked – by employees and activists – to get involved. Some CEOs are eager to do so, while others are much more reluctant:

“Companies are being cautious and deliberative in how they factor abortion into their long-term ESG plans despite demands for swift action from shareholders, employees, and the public after the Supreme Court overturned Roe v. Wade.

Following the ruling in Dobbs v. Jackson Women’s Health Organization, companies including Microsoft Corp., Meta Platforms Inc., and JPMorgan Chase & Co. said they would help cover employees’ travel costs to access an abortion. Other companies have issued more neutral statements, citing their existing health benefits.

Critics on social media were quick to point to big corporations that didn’t immediately voice any statements, including Walmart Inc. In response, company CEO Doug McMillon told employees July 1 that Walmart’s leadership is listening to “many different viewpoints” from its employees and will work “thoughtfully and diligently to figure out the best path forward.”

Most businesses had time to plan an initial statement and response to Roe being overturned, given the draft opinion was leaked in May. But now, behind closed doors, those companies are mulling a mass of questions, including whether to accommodate part-time workers and provide paid sick leave for any travel….

Corporate executives and boards of directors must now plan for what consistent action they will take on reproductive health rights across their business, including responding to thorny investor questions about benefits and political spending, according to environmental, social, and governance (ESG) consultants.”

At the same time, opponents of ESG are weighing in to express their belief that getting involved in the abortion issue is well beyond the role of the corporation, and that executives who use corporate funds to pay for abortion procedures are unfairly and unethically taking from their shareholders. On July 11, Andy Puzder wrote the following:

“Woke capitalism attempts to reorient modern corporations from their traditional responsibility to generate returns for investors to a new mission of supporting leftist political activism. The Left has utilized this approach when advancing radical environmental policies, opposing Georgia’s voter-fraud protections, or challenging Florida’s law restricting instruction on gender identity and sexual orientation through the third grade.  

Now the Left is employing woke capitalism to advance its position on abortion…. President Biden has signed an executive order pushing back against potential state efforts to limit a woman’s ability to cross state lines for an abortion.

Biden’s executive order would protect the efforts of at least 60 U.S. corporations that have announced abortion travel benefits for employees unable to get abortions where they reside.

The monies to pay for these costs could otherwise be used to reduce operating expenses (increasing investors’ returns) or to pay dividends. These woke CEOs are not using their own money to fund this perk – they are using their investors’ monies to advance policies that these investors may well oppose. This is woke capitalism’s cornerstone: using other peoples’ resources to advance political goals.”

In the Ivory Tower

MIT research shows that ESG returns might be illusory – or fraudulent

In a press release late last month, the Sloan School of Management at MIT touted a paper (last revised in September 2021) co-authored by the school’s Florian Berg that purports to show that positive ESG return-on-investment is less about actual returns and more about retroactive fiddling with ESG scores:

“A research paper by MIT Sloan School of Management research associate Florian Berg and Kornelia Fabisik and Zacharias Sautner of the Frankfurt School of Finance and Management, validates these concerns, as they discovered “widespread and repeated” changes to the historical ESG scores by a leading vendor of this data.

Is history repeating itself? The (un)repeatable past of ESG ratings” won the John L. Weinberg/IRRCi Research Award from the Weinberg Center at the University of Delaware, which was presented at the 2022 Corporate Governance Symposium by the European Corporate Governance Institute (ECGI).

Berg says, “The incredible growth of sustainable finance has created a billion-dollar market for ESG data. Yet, we found that the data is not reliable or consistent. The changes made in ESG scores at any particular time in history are massive.”

He explains that the data for any specific point in time should remain the same for a firm unless there is a documented reason for a retroactive change. However, their study revealed significant unannounced and unexplained changes to the data provided by Refinitive ESG, which was previously owned by Thomson Reuters. For example, looking at two versions of the same Refinitive ESG data for identical firm years – one from September 2018 and the other from September 2020 – the median overall scores in the rewritten data were 18% lower than in the initial data.

“The score rewriting leads to large changes in what are deemed to be high- or low-ESG firms. This is important because the classification of firms is widely used in ESG research and the investment industry,” says Berg, cofounder and research associate of the MIT Sloan Sustainability Initiative’s Aggregate Confusion Project.

In their paper, the researchers highlight how firms that performed better in a given year experienced upgrades in their E and S scores for that year through the data rewriting. Using predictive regressions, they showed that investing in firms with higher ESG scores in the initial data would not have led to economically or statistically significant performance gains. Yet, in the rewritten data, they found economically large, statistically significant positive effects of the E&S score on the firm’s future stock returns.

“These large differences matter because this performance would not have been possible with the data available to investors when forming their investment strategies,” says Berg.”

Notable quotes

“The Many Reasons ESG Is a Loser,” Andy Kessler, The Wall Street Journal, July 10, 2022:

“Let’s look inside. BlackRock’s ESG Aware MSCI USA ETF has almost the same top holdings as its S&P 500 ETF with Apple, Microsoft, Amazon, Alphabet, Tesla, Nvidia, JP Morgan Chase, Johnson & Johnson and United Healthcare, dropping Berkshire Hathaway and moving Meta and Home Depot to higher weightings. Fees on ESG Aware are 0.15%, or 15 basis points. BlackRock’s plain-vanilla iShares Core S&P 500 ETF index fund charges only 3 basis points. That’s right, BlackRock charges five times as much for juggling a few names and slapping ESG on the name. Capitalists indeed. As of June 30, ESG Aware was down 23.7% vs. down 20% for the S&P 500 index.

Look away if you’re squeamish, but BlackRock helpfully notes that the S&P 500 has investments of 0.92% in controversial weapons, 0.59% in nuclear weapons, 0.68% in tobacco and 0.12% in United Nations Global Compact violators. Yikes. But not the BlackRock Sustainable Advantage Large Cap Core Fund, an actively managed fund with none of that icky stuff. On May 31 its top holdings were similar to the S&P 500 with lower weightings of Berkshire and UnitedHealth and increased weightings of Visa and Exxon. Exxon! Gross fees were 0.74% and net fees of 0.49% as BlackRock chooses to waive some fees. This fund was down 20.6% as of June 30.

So yes, you’re paying someone five to 15 times as much to adjust some weightings and perform worse. For BlackRock, ESG and sustainable investing don’t seem to be about responsible or socially just investing, they are simply a lucrative business model.”

Previewing Alaska’s RCV special general election for U.S. House

A special election to fill the seat representing Alaska’s at-large district in the U.S. House will be held on Aug. 16. Sarah Palin (R), Nicholas Begich III (R), and Mary Peltola (D) are running. Al Gross (I) also advanced from the June 11 top-four primary, but he withdrew from the race on June 20. In the special primary, Palin received 27% of the vote, Begich 19%, Gross 13%, and Peltola 10%.

Former Rep. Don Young (R) died in March.

Begich founded a technology development company and co-founded a company that invests in startups. He co-chaired the Alaska Republican Party Finance Committee and Young’s 2020 re-election campaign. Begich entered the regular U.S. House primary election before Young’s death. Begich is campaigning on his business background, saying he can “make the business case for Alaska effectively down in D.C.”

Palin served as governor of Alaska from 2006 to 2009 and was John McCain’s (R) vice presidential running mate in 2008. Palin is campaigning on her record as governor, which she says includes taking “meaningful steps toward energy independence, passing bipartisan ethics reform, and facilitating the biggest private sector infrastructure project in U.S. history.” Palin said after Young’s death, “As I’ve watched the far left destroy the country, I knew I had to step up and join the fight.”

Peltola served in the Alaska House of Representatives from 1999 to 2009 and is interim executive director of the Kuskokwim River Inter-Tribal Fish Commission. Peltola calls herself a “[p]roven legislative leader and coalition builder.” She emphasizes her background in fishing and prioritization of marine resource management as a key campaign issue. Peltola also highlights that she is an Alaska Native woman.

The Alaska Republican Party endorsed Begich. Former President Donald Trump (R) backed Palin. Five primary candidates endorsed Peltola: independents Gross* and Santa Claus and Democrats Christopher Constant, Mike Milligan, and Emil Notti.

All 48 primary candidates ran on the same ballot. The 16 Republican primary candidates received 58% of the vote combined. The 22 candidates running as nonpartisans or undeclared received 24%. Six Democratic candidates received 17%. The remaining 1% of voters chose a third-party candidate. Gross, the nonpartisan candidate with the most votes, ran for U.S. Senate as a Democrat in 2020.

The special primary was the first top-four congressional primary in U.S. history. The special general election will use ranked-choice voting.

*Gross also endorsed Tara Sweeney (R), but the state supreme court ruled she could not advance to the general election.

Additional reading:

United States House of Representatives special election in Alaska, 2022 (June 11 top-four primary)

Alaska Ballot Measure 2, Top-Four Ranked-Choice Voting and Campaign Finance Laws Initiative (2020)