POLITICS + GOVERNMENT

Utah AG claims ESG or ‘climate investing’ contributed to SVB collapse

Mar 22, 2023, 5:30 PM

FILE: The Utah attorney general’s office at the Capitol in Salt Lake City on Friday, Jan. 27, 202...

FILE: The Utah attorney general’s office at the Capitol in Salt Lake City on Friday, Jan. 27, 2023. KSL and the Utah Attorney General’s Office are squaring off in a legal fight over access to Attorney General Sean Reyes’ work calendar. (Jeffrey D. Allred, Deseret News)

(Jeffrey D. Allred, Deseret News)

SALT LAKE CITY  — Utah’s Attorney General has sent a letter to the federal government claiming climate investing, or Environmental Social Governance (ESG) contributed to the collapse of Silicon Valley Bank (SVB).

The letter — sent to the heads of the Treasury, Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) — added that the administration needs to stop elevating its “climate risk” agenda above other “true” risks.

Related: Utah leading a lawsuit against new ESG rule affecting 401(k) plans

It also questioned the political motivations of the agencies that Reyes believes “bailed out” SVB depositors. 

ESG investing

It’s the latest in Reyes’ and other Utah Republican leaders’ ongoing battle against Environmental Social Governance (ESG) investing. That’s a type of investment that focuses on a company working to help the environment or social causes (in this case SVB’s solar or sustainability projects.) ESG investing is not a requirement of the Biden administration. But the AG’s office argues the goal of investing — at least, when the government is investing people’s money — should be profit.  

“We’re not trying to prevent anyone from investing the way they want to invest,” said Utah Solicitor General Melissa Holyoak, who spoke to KSL NewsRadio on behalf of Attorney General Sean Reyes.

“What we don’t want is pressure from the government pushing investments in one way or the other, or allowing rules that allow people with fiduciary duties — like investment managers — to push investments into things that they shouldn’t be doing.”

The AG’s office believes SVB made “speculative sustainability investments,” like in the solar industry.

“The problem here is SVB had thousands of clean tech industry clients, so an overexposure to that industry,” said Holyoak. That’s something that she and AG Reyes believe is a result of the administration’s charge to focus on climate risk.

Specifically, “[SVB] had committed to $5 billion in financing of speculative sustainability investments. SVB claimed that it was involved in over 60% of community solar financings,” the letter reads. “It was, in other words, the kind of bank that perfectly encapsulated your regulatory posture of viewing climate change as the leading risk to the finance industry, and as a ripe business opportunity to boot.”

But the Federal Reserve has indicated that SVB’s poor risk management led to selling tons of US Treasury bonds at a time when interest rates had risen drastically.  

“Just to be clear, we think [ESG investing] contributed to [the SVB collapse] but it wasn’t just the sole reason. We do think the increased interest rates also, was probably the largest contributor of this,” said Holyoak.

“But we do think the Biden administration’s focus on climate risk in the financial regulatory world really put pressure on this.”

‘Bailout’ of SVB depositors 

The letter sent by Reyes also asserts that the administration is “bailing out” SVB depositors because they’re in the clean-tech sector.

“It’s not difficult to suggest that the Biden administration might certainly be motivated by a net-zero compliant climate agenda. And the ability to do so  requires that these clean-tech startups, that they are able to be bailed out of the loss of these funds.”

On March 12, President Biden said no shareholders, senior management, nor certain unsecured debtholders would be bailed out.

“But these are companies that are being utilized to fulfill the climate agenda that Biden is bringing on,” said Holyoak. “If those depositors were, for example, oil and gas companies, would the Biden administration feel the same need to bail out those tech companies? I don’t know,” Holyoak said.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Politics + Government

none of the above voters dislike both president biden, pictured left, and former president trump, p...

Simone Seikaly

There’s probably more “none of the above” voters than we know

A 'none of the above' voter doesn't like any of the candidates running for the U.S. presidency. Right now 20% of U.S. voters feel this way.

13 hours ago

Former US President and current GOP Presidential candidate Donald Trump...

MICHAEL R. SISAK, Associated Press

Trump’s lawyers say it is impossible for him to post bond covering $454 million civil fraud judgment

Trump's lawyers said “obtaining an appeal bond in the full amount” of the judgment “is not possible under the circumstances presented."

13 hours ago

us capitol shown, government shutdown deadline approaching...

Lauren Fox, Clare Foran and Manu Raju, CNN

Border policy a key sticking point in Congress with shutdown deadline just days away

While government operations would halt if funding is not approved in time, the damage would be minimal if a shutdown is relegated to the weekend.

14 hours ago

supreme court shown, social media decision...

MARK SHERMAN, Associated Press

Supreme Court seems favorable to Biden administration over efforts to combat social media posts

The case Monday was among several the court is considering that affect social media companies in the context of free speech.

14 hours ago

Sen Curtis Bramble, R-Provo, speaks during a Senate Business and Labor Committee meeting at the Cap...

Dan Bammes

Utahn who’s served 24 years in the legislature, is stepping down

Bramble will serve through Dec. 31, 2024, said the deputy chief of staff for the Utah Senate. He will not run for re-election.

15 hours ago

FILE - The TikTok app logo appears in Tokyo, on Sept. 28, 2020. US lawmakers are concerned about Be...

Laura He, CNN

Analysis: Is TikTok really Chinese?

U.S. lawmakers say they worry TikTok could share data with the Chinese government, what is the evidence that supports these concerns?

19 hours ago

Sponsored Articles

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Wellsville Mountains in the spring with a pond in the foreground...

Wasatch Property Management

Advantages of Renting Over Owning a Home

Renting allows you to enjoy luxury amenities and low maintenance without the long-term commitment and responsibilities of owning a home.

Clouds over a red rock vista in Hurricane, Utah...

Wasatch Property Management

Why Southern Utah is a Retirement Paradise

Retirement in southern Utah offers plenty of cultural and recreational opportunities. Find out all that this region has to offer.

Utah AG claims ESG or ‘climate investing’ contributed to SVB collapse